Preamble

The House met at half-past Two o'clock

PRAYERS

[Mr. SPEAKER in the Chair]

PRIVATE BUSINESS

GLASGOW CORPORATION (PARKS, ETC.) ORDER CONFIRMATION BILL

Read the Third time and passed.

ABERDEEN CORPORATION ORDER CONFIRMATION

Mr. Gordon Campbell presented a Bill to confirm a Provisional Order under Section 7 of the Private Legislation Procedure (Scotland) Act 1936, relating to Aberdeen Corporation; and the same was read the First time; and ordered to be considered upon Tuesday next and to be printed. [Bill 185.]

DUNDEE CORPORATION (BROKERS, ETC.) ORDER CONFIRMATION

Mr. Gordon Campbell presented a Bill to confirm a Provisional Order under Section 7 of the Private Legislation Procedure (Scotland) Act 1936, relating to Dundee Corporation (Brokers, etc); and the same was read the First time; and ordered to be considered upon Tuesday next and to be printed. [Bill 186.]

NATIONAL TRUST FOR SCOTLAND ORDER CONFIRMATION

Mr. Gordon Campbell presented a Bill to confirm a Provisional Order under Section 7 of the Private Legislation Procedure (Scotland) Act 1936, relating to the National Trust for Scotland; and the same was read the First time; and ordered to be considered upon Tuesday next and to be printed. [Bill 187.]

Oral Answers to Questions — ENVIRONMENT

River Thames (Driftwood)

Mr. Hugh Jenkins: asked the Secretary of State for the Environment if, in the interests of pollution control, he will call a conference of the responsible authorities to co-ordinate efforts to clear the Thames of driftwood.

The Under-Secretary of State for the Environment (Mr. Eldon Griffiths): Keeping the Thames free of driftwood is a matter for the responsible authorities. I have no evidence to suggest that there is any lack of co-ordination but I should be glad to draw the attention of the responsible authorities to any specific evidence the hon. Member may have.

Mr. Jenkins: I am grateful to the hon. Gentleman for that reply. I shall give him some evidence which I hope he will draw to the attention of the responsible authority, because driftwood in the Thames is getting worse and worse. It is a danger to all forms of boating, whether it be rowing, sailing, or any other boating activity, and it is high time that a co-ordinated effort was made to deal with the problem. The problem is certainly not being satisfactorily dealt with at the moment. I should be grateful if the hon. Gentleman would go further than he did in his answer and take an active initiative in bringing together the appropriate bodies to find a solution to the problem and help with the necessary money to deal with the situation.

Mr. Griffiths: I cannot give any undertaking on the last point because the responsibility clearly is with the statutory authorities. About 6,000 tons of driftwood is collected and cleared each year from the Thames, and it would be a great deal less if the public and those who go out in boats on the Thames were to give up the nasty habit of chucking driftwood and debris into the river.

Mr. Geoffrey Finsberg: Can my hon. Friend say whether any of the driftwood represents planks of the London Labour Party's election programmes of 1964 and


1967 which first advocated the building of the London motor box?

Mr. Griffiths: I shall need notice of that question.

Mr. Spearing: Will the Under-Secretary of State withdraw his aspersion on those who use boats on the river, implying that they are responsible for throwing in driftwood? Will he make inquiries of the Port of London Authority, which is supposed to be responsible for these matters, but in fact is not very responsible, to see that the authority provides a sufficient number of rubbish barges for cargo vessels to tip waste from their holds over the side, instead of its being dumped in the river clandestinely at night?

Mr. Griffiths: I cannot accept any of the criticisms made by the hon. Member for Acton (Mr. Spearing) of the PLA, which collects and disperses 6,000 tons——

Mr. Spearing: That is what the PLA says.

Mr. Griffiths: —of driftwood and debris from the river each year.

Civil Engineering (Codes of Practice)

Mrs. Renée Short: asked the Secretary of State for the Environment if he will make a statement on his Department's negotiation to agree on a common European system of codes of practice for major methods of civil engineering construction and materials, including concrete.

The Secretary of State for the Environment (Mr. Geoffrey Rippon): My officials are taking part in studies of the technical and legal obstacles to trade in the field of building and civil engineering within a group of experts convened by the Commission of the European Communities. The possibility referred to by the hon. Member is one of a number being explored by this group. It is too early to say what conclusions might emerge from these discussions.

Mrs. Short: Will the right hon. and learned Gentleman say what steps he is taking to ensure the co-operation of the Comité Européen du Béton, which is supported by the Department for the Environment, and in which a large num-

ber of eminent engineers and research workers are engaged? What is he doing to ensure that the new British code, which is the basis of the international code of the CEB, is adopted as a basis for a new code of practice?

Mr. Rippon: I appreciate the importance of the organisation to which the hon. Lady refers and I well understand her interest in it. These discussions are at an early stage. What other organisations might be involved is largely a matter for the various international organisations themselves to decide, but we have not yet even reached the stage of negotiations, much less of conclusions.

Mr. Sydney Chapman: Does the Secretary of State agree that it would be a good thing if European countries could agree on a code of practice such as that used in this country, which is universally recognised as the best in the world? Does he agree that with material such as concrete the problem involves not only the composition of the mix but supervision of the process—which is the main reason for the frequency of failure of concrete edifices on the Continent compared with what happens in this country?

Mr. Rippon: It would be helpful if we were to develop an international code of practice for concrete structures and a great many other building materials. I believe we have a great deal to contribute because our standards are among the highest in the world.

New Town Houses (Sale)

Mr. Allason: asked the Secretary of State for the Environment what progress has been made in offering the sale of new town flats and maisonettes to sitting tenants.

The Minister for Housing and Construction (Mr. Paul Channon): Development corporations and the commission were asked in June to review their stocks of flats and maisonettes with a view to making available as many of them as possible for sale to sitting tenants at a discount.

Mr. Allason: I congratulate my hon. Friend on that reply, and wish to inform him that a large number of flat-dwellers will be delighted to hear what he has said. What steps is he taking to ensure


that flat-dwellers, as opposed to the development corporations, know about this?

Mr. Channon: I think and hope that this has been widely publicised, but if there are examples where it is not widely known I hope that my hon. Friend the Member for Hemel Hempstead (Mr. Allason) will seek to publicise this matter more widely in his own constituency. I shall be delighted to consider what other publicity measures might be necessary.

Mr. Churchill: Is my hon. Friend aware that in the People's Republic of China and the Republic of Romania it is possible for people to buy their own homes? Is not it time that the British people had this basic right?

Mr. Channon: It always astonishes me that about the only people in the world who do not want to sell houses to their tenants are Labour-controlled local authorities.

Mr. William Price: And the brewers.

Tennis Professionals

Mr. Dalyell: asked the Secretary of State for the Environment if he will make a statement on his discussions in the last three weeks with representatives of the lawn tennis authorities and the professional players.

Mr. W. H. K. Baker: asked the Secretary of State for the Environment if he will make a statement on his meeting on 20th June with the Association of Tennis Professionals; and what advice he offered the association.

Mr. Eldon Griffiths: I met representatives of the Association of Tennis Professionals and the International Lawn Tennis Federation and hoped that by discussing their differences with an impartial third party they might have been able to resolve them. I regret that the gap between them was too wide to be bridged in the time available. I think that everyone will agree that Wimbledon nevertheless survived.

Mr. Dalyell: As a matter of curiosity, what was the point of all those telephone calls by the Minister to Yugoslavia, and did his action have the approval of Mr.

Herman David, or the All England Club, or the Sports Council?

Mr. Griffiths: I seek no approval from any of these bodies. I sought only to help those members of the British public who had looked forward to a successful Wimbledon. I regret very much that this incident should have happened. But taking everything into account, I hope that Wimbledon survives and will go on surviving regardless of these petty squabbles.

Mr. Baker: Does not my hon. Friend agree that, if anything, Wimbledon this year was better, cleaner and more fairly played than in the past, and does not my hon. Friend deprecate the strong-arm action of one J. Kramer?

Mr. Griffiths: I can only say that I personally enjoyed Wimbledon. I hope that other hon. Members did. For the most part, I think that the less the Government have to do in the day-to-day management of sport the better. But wherever I am asked to help I am always willing to do so.

Mr. Denis Howell: We are happy that the Minister tried to resolve the matter, but does he not agree that it was a little odd for a British Minister responsible for sport to make telephone calls to Yugoslavia in an attempt to arrange a deal between a Yugoslav player and the Yugoslav Tennis Association? What ministerial responsibility was involved? Can the hon. Gentleman confirm, as I hope he can, that he made it clear to the representatives of the players whom he met that, although we support their having greater representation on any appropriate committee, in fact in any sport the governing body must govern and that tournaments like Wimbledon, while providing proper rewards to players, also have financial responsibility to provide money for the development of the game—money for development that has benefited many of these players in the past?

Mr. Griffiths: I agree with the second part of the hon. Gentleman's question. As for the first part, I repeat that I am always anxious to help.

Railways (Government Policy)

Mr. Whitehead: asked the Secretary of State for the Environment what reply


he has made to the proposals of the Railways Board for the future development of British Rail.

Mr. William Hamilton: asked the Secretary of State for the Environment if he will make a statement on his policy towards the future of the British Rail network, with particular reference to Scotland.

Mr. David Steel: asked the Secretary of State for the Environment whether he intends to publish a White Paper on his policy towards railways and if he will make a statement.

The Minister for Transport Industries (Mr. John Peyton): I have at present nothing to add to what I said in the debate on 4th July.

Mr. Whitehead: Is the Minister aware that many railwaymen in my constituency were disappointed by the rather casual attitude taken by the right hon. Gentleman in our debate on the railways last week? As the right hon. Gentleman is taking his time, and as this Government claim to think the unthinkable, and frequently have to, will he undertake to make his decision in the light of a comprehensive review by his Department of the relations between available fuel supplies, transport systems and the environment, since this will probably lead him to the conclusion that it would be foolish to spend as little money on the railways as the Railways Board recommends? We should be spending far more.

Mr. Peyton: If the hon. Gentleman's constituents believe that there was anything casual in my attitude to the railways it is only because they have been rash enough to listen to him. As for the remainder of his supplementary question, all I say is that all relevant factors will be borne in mind.

Sir G. Nabarro: While congratulating my right hon. Friend on his impeccable debating behaviour the other day, may I ask him to take note of an omission from the debate due to the brevity of speeches all round—with one notable exception—and that was the realisation of the huge real estate value of the land that is available on British Railways and which now

ought to be liquidated in order to reinforce the finances of the railways? Will my right hon. Friend remind British Railways of this before rendering their final report to this House?

Mr. Peyton: I assure my hon. Friend that no one is losing sight of the importance of the assets represented by British Railways land.

Mr. William Hamilton: Does the right hon. Gentleman recall that in last week's debate he made no mention of the Scottish railway system? Will he undertake to examine the memorandum provided by the Scottish Railway Development Association, which recommends a Scottish electrified railway system that would cost less than one-twentieth of the estimated cost of the Maplin project? Will the right bon. Gentleman further undertake to use the powers that he and the Government have under the Local Employment Act and the Transport Act 1968 to help finance the railway system as part of the regional policies of the Government? Those powers have not been used in Scotland to the extent that they have in England.

Mr. Peyton: I did not omit to mention the Scottish railways the other day. I did not mention any specific part of the network. I am always ready to consider any representations or advice about the railways that I receive from Scotland.

Mr. David Steel: Is one of the relevant factors that the right hon. Gentleman says he will consider before publishing his response to British Railways—especially before he considers any further axing of railways in Scotland—the views of the European Commission, which indicate that it supports the belief that railways should be subsidised, in the interests of balanced regional development?

Mr. Peyton: The hon. Gentleman forces me to repeat the rather dull answer that I gave just now. All relevant factors will be borne in mind.

Dr. Stuttaford: Does my right hon. Friend agree that it is not really a subsidy that the railways need? They need the taxpayer to pay for almost the whole of our railroad system. Unless this happens our roads will become increasingly clogged and there will be no future for transport in this country.

Mr. Peyton: My hon. Friend is going a little far in making a nightmare of what is admittedly a difficult situation.

Mr. Mulley: I do not wish to go over last week's debate again, but the Minister knows that there is great anxiety. Will he now give some indication when the Government intend to announce their policy for British Railways? Meanwhile, will the right hon. Gentleman withdraw any suggestion or directive that has been been made to British Railways that in developing their property assets they must share the proceeds with private developers? Would not it be much better for the nation and the railways if they had the benefit of any development they can make?

Mr. Peyton: I have given no directive to anyone on this or any other subject. It is a bad habit, which I have left to right hon. and hon. Members of the Opposition. As for the date of publication of the document to which I referred in the debate the other day, I do not think that it will be possible to produce it before the autumn. I am now engaged in a series of consultations with the railway unions and I should not like to hasten that process.

House Prices

Mr. Horam: asked the Secretary of State for the Environment what is the current annual percentage increase in the average price of new houses, on the latest published figures.

Mr. William Price: asked the Secretary of State for the Environment by what percentage new house prices have risen since June 1970.

The Under-Secretary of State for the Environment (Mr. Reginald Eyre): The average price of a new house mortgaged with building societies in Great Britain increased by 87 per cent. between the second quarter of 1970 and the first quarter of 1973.

Mr. Horam: Is it not a sad comment on the poor state of the housing market that the most recent figures reported in the papers are regarded almost as welcome?

Mr. Eyre: I am glad that the hon. Gentleman referred to the recent Nation-

wide figures, which show that the rate of increase in house prices is slowing down markedly. The Nationwide survey to which the hon. Gentleman referred shows that new house prices rose by 8 per cent. during the first six months of 1973, compared with 25 per cent. in the second half of 1972.

Mr. Idris Owen: Would my hon. Friend care to investigate the massive escalation in the price of construction timber coming from Scandinavia and the Canadian seaboard as this is adding considerably to the cost of housing? Further, will he again monitor the ever increasing price of land?

Mr. Eyre: My hon. Friend is right in referring to one of the world factors that have a substantial effect on prices here.

Mr. Price: Why does not the Minister admit that he has given a most appalling answer? Is he proud of the fact that, in percentage terms, he has even beaten the Minister of Agriculture, Fisheries and Food? To do so by 250 per cent. is an act of genius. Is it not clear from the way things are going that before long no one earning less than £100 a week will be able to buy a three-bedroom detached house? How are the Prime Minister and the motley crew on the Government Front Bench going to face young couples at the next General Election?

Mr. Eyre: The hon. Gentleman will remember the depressed state of the housing market in the Midlands in 1969 and 1970, when few people had sufficient confidence to enter into housing transactions. It is wrong to suggest that first-time purchasers and young couples are not holding their own. In the first quarter of 1973 building societies issued 37,000 new mortgages to people with incomes up to the average manual worker's wage. By way of comparison, in the first quarter of 1970 only 30,000 mortgages were issued to such people. Furthermore, the number of building society mortgages to those buying homes for the first time rose from 61,000 in 1970 to 79,000 over the same period. The comparable figure for borrowers under 25—which is also important—rose from 24,000 to 31,000.

Mr. Freeson: Is it not about time Ministers in this Department recognised


that the constant quoting of percentage figures, and a whole series of them, for the last three years does nothing to alleviate the fact that housing construction today is lower than in 1963, while prices have continued to rise? Is not the Government's housing policy an absolute disaster for the country?

Mr. Eyre: The hon. Gentleman must not try to avoid facts that show that more and more people are able to enter into house purchase transactions and become owners, and have the confidence to do so. The hon. Gentleman must remember the terrible fall in the house purchase market in 1969 and 1970. We have brought the figure up from 165,000 in 1969 to about 240,000 this year.

South Yorkshire Navigation Canal

Mr. Harold Walker: asked the Secretary of State for the Environment if he will make a statement about the future classification and conseqent annual cost of the South Yorkshire Navigation Canal.

Mr. Eldon Griffiths: The future of this waterway will depend on whether the improvement proposed by the British Waterways Board can be justified. I am awaiting from the board more concrete evidence that the waterway would, if improved, attract the necessary additional traffic.

Mr. Walker: When the British Waterways Board writes to the Minister—and it will write to the Minister—will he, with the approval of the chairman, publish the board's letter in the same way as he published his letter to Sir Frank Price? Will the hon. Gentleman bear in mind that if he does not accede to the board's request for the upgrading of this waterway it will cost at least £750,000 to put it into condition? This scheme is widely recognised as the acid test of the Government's intentions and attitude towards the further development of commercial inland waterways, and the Government's persistent refusal to approve it has plunged into deep despair those who care for the waterways and their future.

Mr. Griffiths: The acid test of any public investment of this kind must be a reasonable judgment whether it will bring some return. The matter is being examined in great detail. As the hon.

Gentleman knows, the losses that have been sustained by that waterway are high and the alternative forms of transport—notably the railway, which runs virtually along the same line—are not used. It must, therefore, be prudent to make a realistic judgment whether public investment in this canal could be justified.

Mr. Edwin Wainwright: Does not the Minister realise that he is wrong in thinking that our transport system does not need to be further improved? Does he realise that our roads are congested, and that this waterway could be a tremendous help for the future by taking traffic off the roads? Further, has the hon. Gentleman considered the amenities of the waterway? Is it to be said that for the want of £2¼ million we are to destroy amenities that we could enjoy for a lifetime?

Mr. Griffiths: The hon. Gentleman and I are at one in wishing to relieve pressure upon the roads, but I remind him that the first-class railway track that runs along the same line as this canal is, regrettably, not used sufficiently for heavy freight. Those who wish to relieve pressure on the roads have the option of moving to the railways. If they are not prepared to exercise that option, it must be a good question whether public investment in an additional waterway would be proper.

Mr. Wainwright: What about the amenities?

Local Authorities (Members' Interests)

Mr. David Stoddart: asked the Secretary of State for the Environment if he will introduce legislation to provide that the financial interests of local authority members and officers are announced at each annual meeting of the council and recorded in the minutes of such meetings.

The Minister for Local Government and Development (Mr. Graham Page): I would refer the hon. Member to the reply I gave on 29th June to a Question on this subject from the hon. Member for Newark (Mr. Bishop).

Mr. Stoddart: Does not the right hon. Gentleman agree that this is a matter of great urgency? Is he not aware that the


public are concerned about graft in local government? Does he not agree that it is urgently necessary for him to take some action, if not by the method that I suggest then by setting up a public register that is open to the public, so that the great majority of people in local government, who are absolutely straight, are not maligned and do not come under suspicion because of the actions of a few? Will the right hon. Gentleman take this matter seriously and take urgent action to set up such a register?

Mr. Page: I assure the hon. Gentleman that the matter is taken seriously. I cannot do better than repeat the words of my right hon. Friend the Prime Minister, who recently said:
I am still studying the part relating to local government. For obvious reasons, it may not be possible to make a statement on this matter for a little while. We have just discussed the question of public bodies."—[OFFICIAL REPORT, 3rd May 1973; Vol. 855, c. 1463]

Mr. Evelyn King: Has my right hon. Friend considered the practice that is prevalent in many local authorities under which, for private reward, planning officers or their assistants draw up plans on which they are afterwards asked to pass judgment? Is not that improper? Will my right hon. Friend, as his predecessors have not always done, accept that his Department has some responsibility for laying down standards for what is decent and indecent, and will he issue those standards to local authorities so that they know what is proper practice?

Mr. Page: I do not think that it is the duty of my right hon. and learned Friend the Secretary of State to lay down rules for the employment of the staff of local authorities, but the consideration of this subject will cover the interests of officers as well as members.

Mr. Loughlin: Does the right hon. Gentleman recollect that the answer from the Prime Minister was given to me a short time ago? Is not the Department itself seized of the urgency of this situation, and would it not be better to deal with the matter before the new local authority set-up comes into operation? Is the right hon. Gentleman aware that a neighbouring authority to mine has just set up a land committee, the chairman of which is Mr. Hyett, a builder, and that

the vice-chairman is his foreman? The situation lends itself to suspicion on the part of the general public. Is not there a great degree of urgency about the matter?

Mr. Page: I should not like to comment on any particular case of which I do not have the whole facts. These matters are all under consideration, and I appreciate the urgency of them.

Mr. William Clark: Does my right hon. Friend not agree that, in view of the talk about Members of Parliament declaring their interests, there is added urgency in the suggestion of the setting up of a public register for people serving on local authorities? Surely the general public must realise that if Members of Parliament have to declare their interests and local authority members do not there is discrimination against Members of Parliament?

Mr. Page: Indeed, but members of local authorities can and do declare their interests, subject to a general notice in writing. It is true that the register is not open to the public—we discussed this matter on the Local Government Bill—but they can register their interests there. Under the law as it stands, local authority members are required to disclose any pecuniary interest they may have in a matter currently under consideration and must not take part in the proceedings unless permitted to do so by the Secretary of State.

Mr. Oakes: Whatever the Prime Minister may have said, did not the Government have the opportunity to put this matter right in the Local Government Bill, and did they not refuse to do so? Is not one of the principal causes of complaint the fact that a councillor can declare an interest in a register kept with the town clerk, which is not available to the Press? Will the Government consult local authorities urgently, with a view to producing a White Paper urgently and legislation before the new authorities come into being next April?

Mr. Page: I have always thought that this is a subject for all-party discussion and not for the Government to decide on their own. We are certainly considering the form of discussion, and what should be brought before such a discussion.

Slag Banks (Removal Grants)

Mr. Booth: asked the Secretary of State for the Environment how many applications for development area grants for the removal of slag banks for use by the construction industry have been received by the Department; and how many of these applications have been approved and to which processes have the grants related.

Mr. Graham Page: Much slag is disposed of commercially and no question of grant arises. In other cases, however, applications are made for derelict land reclamation grants for the treatment of slag banks.
There have been nine such applications; five have been approved in detail and two in principle; two are being considered. The reclamation schemes do not generally provide for any particular use of the material.

Mr. Booth: Does the Minister accept that the imminent serious shortage of aggregates and hardfill in the South-East offers a unique opportunity to remove many of the slag banks that disfigure development areas? What steps are the Government prepared to take to enable the Ormsgill slag bank to be shipped through Barrow Docks to areas where it could be used by the construction industry? Will the Government advise the British Transport Docks Board to delay any decision on the termination of commercial activity in Barrow Docks until the Government have taken appropriate decisions in this matter?

Mr. Page: In regard to the Ormsgill slag bank in Barrow-in-Furness, owned by the Millom Ironworks, the regional office in July 1970 gave Barrow County Borough Council outline approval for the reclamation of the 100 acres concerned but this has yet to be followed up. no doubt because of the high cost, which may exceed £1 million. But slag from iron and steel production is now almost all processed for industrial use instead of accumulating in heaps. as in the past. There is also our experimental dual tendering scheme for road building.

River Pollution

Mr. Duffy: asked the Secretary of State for the Environment if he is satis-

fied with the operation of the Rivers (prevention of Pollution) Act 1961, in view of the continued oil pollution of the River Don in Sheffield and south Yorkshite.

Mr. Eldon Griffiths: No, Sir, and my right hon. and learned Friend has already told the House that he hopes to introduce legislation during the lifetime of this Parliament greatly to strengthen the existing system of controls.

Mr. Duffy: That reply will be received with considerable gratification in Sheffield, where, given the quality of the local Press, it has long been felt that the most pertinent weapon in the face of the polluters was publicity. It was thought that there was something wrong with an Act that prevented officials from giving the names of culprits and the state and content of effluent.

Mr. Griffiths: The hon. Member will be glad to know that among the other proposals that my right hon. and learned Friend has in mind is the ending of unnecessary confidentiality about discharges to the natural environment.

Mr. Scott-Hopkins: On the principle that the polluter should pay for the pollution that he causes in the rivers—not only the Don but the Trent, which is very bad at the moment—will my hon. Friend consider with his right hon. and learned Friend increasing the cost to the polluter for the damage that he is doing to these great rivers?

Mr. Griffiths: Yes, Sir, but I should like to put this into perspective by pointing out that every week since 1970 about four miles of polluted river have been cleared up.

Bypasses (West Sussex)

Mr. Luce: asked the Secretary of State for the Environment what effect the recent reduction in public expenditure will have on the timetable for the construction of bypasses of villages in West Sussex.

The Under-Secretary of State for the Environment (Mr. Keith Speed): The reductions in public expenditure in 197475 will not affect the schemes I think my hon. Friend has in mind.

Mr. Luce: I am grateful to my hon. Friend for that reassurance. Does he realise that for the many residents in my constituency who live in villages and towns life is absolutely intolerable, because they have to suffer from the steady through-flow of traffic, and particularly heavy lorries? Will he make certain that the Government speed up the availability of finance, particularly for those areas committed to bypasses under the principal road preparation list?

Mr. Speed: Yes, but not all these principal road schemes are yet in the firm road programme, so it is too early to give any firm financial forecast.

Sir R. Cary: May I remind my hon. Friend of the needs of some of the villages in the entry to Dover, which have just suffered three ghastly accidents as a result of careering juggernaut lorries?

Mr. Speed: Indeed. My hon. Friend will be pleased to see that none of the A2 schemes has been held up by the cutbacks. We are expecting the results of public inquiries on two or three of these important schemes in the very near future.

Heavy Goods Vehicle Drivers

Mr. Woodnutt: asked the Secretary of State for the Environment if he will change the present heavy goods vehicle driver regulations arising from the Road Safety Act 1967, to enable the holder of a public service vehicle driving licence to drive heavy goods vehicles without a further driving test and to retain the regulation whereby a driver of a heavy goods vehicle has to pass a further test to obtain a licence to drive public service vehicles.

Mr. Peyton: No, Sir.

Mr. Woodnutt: Does my right hon. Friend mind telling me just how he comes to the conclusion that a man who is considered able and responsible enough to have a licence to drive a double-decker bus with 50 passengers is not considered capable and responsible enough to drive an equivalent-sized vehicle carrying anything from machine tools to scrap iron?

Mr. Peyton: There are some notable and conspicuous differences between the two types of vehicle, as well as their operations.

Mr. Huckfield: Does the right hon. Gentleman recognise that there is a total difference between driving a busload of tourists around the Isle of Wight and driving a 32-ton gross antic. up the M1? Will he resist this suggestion, which does not have the blessing of the Transport and General Workers Union? [Laughter.] They are only the drivers. Will he also take powers against such private employment agencies as Manpower, which was encouraging the shift to which the hon. Member for the Isle of Wight (Mr. Woodnutt) referred and in so doing was encouraging all the pirates and cowboys that the heavy goods vehicle licence was supposed to prevent?

Mr. Peyton: My confidence in the answer that I gave to my hon. Friend is slightly diminished by the fact that the hon. Member appears to agree with me. The other point does not arise on this Question.

Ports

Mr. Douglas: asked the Secretary of State for the Environment if he has completed his discussions with the National Ports Council regarding the development of port facilities in South and East England.

Mr. Peyton: I regularly discuss such matters with the council.

Mr. Douglas: Will the right hon. Gentleman be a little more forthcoming about what is happening over the Maplin seaport development? Does not the Port of London Authority appear to be behaving as though the matter of the seaport and oil terminal is a fait accompli, which will go ahead regardless of the airport development? Will he give the Government's view on the question whether or not this is a possible development?

Mr. Peyton: I am only too anxious to help the hon. Gentleman. I was not quite sure to what port facilities he was referring. I am aware now: I am grateful to him There is no question of any fait accompli. The proposals of the Port of London Authority certainly have to come to the Government, and would need approval under Section 9 of the Harbours Act.

Mr. Adley: Will my right hon. Friend bear in mind the particular needs and


potential of the West Country ports—not only Bristol, but Falmouth? Does he agree that if the Channel Tunnel goes ahead it is likely to prove an extremely attractive proposition for people using ports like Bristol and Falmouth, in that Bristol would become the nearest port to North America with overland transportation and direct access to Europe? Would he bear these points in mind and ask the National Ports Council to bear in mind the importance to the West Country ports of the Channel Tunnel decision?

Mr. Peyton: Yes, Sir, of course I shall bear these in mind, but not even the most ardent supporter of Bristol would regard it as being particularly close to the South-East.

Mr. Mulley: Does the Minister recall the strong recommendations that he made in saying that he would be reforming the National Ports Council, and talking of the importance of its role? Has not the whole Maplin project been embarked upon by the Government without the advice of the National Ports Council on the ports aspect of it? Are the Government afraid that the council may show the same enthusiasm about the project as the Civil Aviation Authority appears to be showing?

Mr. Peyton: No, Sir, absolutely not. Before the Government make any decision on the seaport, certainly the advice of the National Ports Council will be sought and very carefully considered.

Long-distance Trains (Telecommunications)

Mr. Dempsey: asked the Secretary of State for the Environment if he will give a general direction to British Rail to install telecommunications in long-distance trains; and if he will make a statement.

Mr. Speed: No, Sir.

Mr. Dempsey: As every signal box between Carlisle and Motherwell, near Glasgow, is now being closed, should there not be some means of telecommunication to cover emergencies on that long stretch of track, where we have had our share of serious train accidents? Will the Minister give further thought to the fact that trains will be travelling from

Glasgow to London at an average speed, we understand, of 100 miles an hour and that, therefore, in the interests of the tourist trade, there should be some means of communicating the names of the places through which trains are passing? If the Minister has not assessed the situation, will he at least conduct an experiment on the line from Glasgow to London to assess the value of train telecommunications?

Mr. Speed: These are matters for the British Railways Board. Regarding tourism, the BRB does not think that the broadcasting of tourist information would be popular for passengers generally. I agree with the board. Tranquillity in our long-distance trains is a very rare thing that we should hold on to.
Concerning telecommunications and signalling, provisions are made, as at present on the electrified line to Crewe, Liverpool and Manchester, to deal with the safety aspects from that point of view.

Mr. Cockeram: Does not my hon. Friend accept that many passengers might like to use telephones on long-distance trains? Is the difficulty of getting two nationalised monopolies to be venturesome too big a problem?

Mr. Speed: On the first point, yes, Sir. In view of the interest in this matter, the BRB and the Post Office have set up a joint working party to look at this situation.

Mr. Lipton: Will the Minister bear in mind that some of us want to be somewhere where we cannot be telephoned? Will he do something to diminish the ubiquity of telephones?

Mr. Speed: I have considerable sympathy with that point of view. There are still the canals.

Mr. Ian Lloyd: Will my hon. Friend encourage British Rail and the Post Office to be at least enterprising to the extent that they resolve the futile disagreement which has prevented the Post Office from installing telephones on the platforms of practically every railway station in this country?

Mr. Speed: That is another question. But I shall certainly look into the


specific details if my hon. Friend will let me have them.

Housing (Disabled Persons)

Mr. Worsley: asked the Secretary of State for the Environment what steps he is taking to encourage local authorities to provide specialist housing for disabled people.

Mr. Channon: The recent White Paper "Widening the Choice: The Next Steps in Housing" made it clear that the Government look to local authorities and voluntary bodies to pay particular attention to the special housing needs of disabled people; and that we shall support them in making better provision.

Mr. Worsley: Will my hon. Friend go a little further than that and give active encouragement? Does he not agree that quite small differences in the design of flats in particular, especially in having rather larger lifts and avoiding steps, can make all the difference in the world to whether a flat is usable by a disabled person or by someone who becomes disabled when living there? Will my hon. Friend take an active lead with local authorities in this matter?

Mr. Channon: I have a great deal of sympathy with what my hon. Friend says. A study is taking place at present between the Department of the Environment and the Department of Health and Social Security. When that has been completed, naturally we shall want to give detailed guidance to local authorities as to how they can best help in meeting this demand.

Mr. Pavitt: Following the national study, will the. hon. Gentleman look at the possibility of local authority activity, in view of the information that is now available, through the Chronically Sick and Disabled Persons Act, and will he adopt a legislative approach whereby all planning permissions have a quota for the disabled in the same way as employment has a quota for disabled persons?

Mr. Channon: This raises very wide issues. I should like to consider them with my hon. Friends who are chiefly responsible for planning matters. The hon. Gentleman was right to refer to the Chronically Sick and Disabled Persons

Act. From that we have learned of a great number of local authorities which are preparing schemes.

Mr. Skinner: If politically disabled Members can seemingly get a specialist house at a stroke, why cannot the truly disabled get one?

Mr. Channon: The whole House enjoys the hon. Gentleman's supplementary questions.

Sir John Tilney: Will my hon. Friend also bear in mind the need to chamfer the pavements and the steps of the flats concerned?

Mr. Channon: Certainly. That is bound to be one of the points to which the study will pay attention.

Mr. Freeson: May I take the Minister back to the Chronically Sick and Disabled Persons Act? Under Section 3 of that Act a duty was laid upon local authorities. The Minister has reserve powers under the 1957 Act to require that duty to be undertaken. The duty is to take account of the needs of the disabled in the submission of any housing proposals to the Minister. Will the Minister please use his powers under the 1957 Act to require local authorities to act more effectively under Section 3 of the Chronically Sick and Disabled Persons Act?

Mr. Channon: The hon. Gentleman is right when he says that there are powers under Section 3 of the Chronically Sick and Disabled Persons Act. As a result, 274 local authorities have notified the Department of proposals for the construction of dwellings for disabled people. I agree that that is not enough, but 274 is certainly a start. I am reluctant—as I am on other issues on which the hon. Gentleman is not usually pressing me—to take compulsory powers over local authorities. But I shall certainly consider what the hon. Gentleman has suggested.

Factory Pollution (West Bromwich)

Miss Boothroyd: asked the Secretary of State for the Environment, in view of the discomfort suffered by residents in Greets Green, West Bromwich, caused by odours from factories manufacturing noxious or offensive gases and particularly escapes from a chemical plant


manufacturing compounds used in the gas industry, whether he is satisfied as a result of reports from the Alkali Inspectorate with the existing control procedures in the factories concerned, and if not, what plans he has for improvements.

Mr. Eldon Griffiths: The complete elimination of escaping odours from this process is regrettably beyond the limits of present-day technological knowledge or practice. I am satisfied that the best practicable means to supress the emissions have been adopted and that advances are continually being sought and will be implemented where practicable.
One of the difficulties is that a firm in this area manufactures odours to give natural gas a distinctive smell which otherwise it would not have.

Miss Boothroyd: I thank the Minister for his reply. Is he aware that, in the case of the factory which manufactures the smell for North Sea gas, the escape of only a very small quantity pollutes the whole area? It clings to people's clothing and their household furnishings. Will the Minister arrange a site meeting with his inspectorate, with representatives of the local authority and local residents' associations and with the industrialists with a view to bringing about greater arrestment procedures in this particular factory and a better mutual understanding of the problem?
Is the Minister aware that the nearest branch of the Alkali Inspectorate is in Sutton Coldfield? In planning for the further dispersal of civil servants, after the recommendations of the Hardman Report, will the Minister move some of the Alkali Inspectorate into the industrial areas in the Black Country, where they would receive a very warm welcome?

Mr. Griffiths: The hon. Lady has rightly put her finger on the problem, in that one of the firms in this area is actually manufacturing smell. Therefore, there is bound to be a certain amount of odour in the area. I appreciate the problem that the hon. Lady has mentioned. If she were to arrange a site meeting I should be very happy to ask the district alkali inspector to attend. I assure the hon. Lady that the inspector in Sutton Cold-field is less than 15 minutes away by one of the motorways that my right hon. Friend is providing.

Miss Boothroyd: On a point of order, Mr. Speaker. What I should really like is for one of the junior Ministers to attend such a meeting.

Mr. Speaker: Order. The content of an answer is not a matter of order.

Building Material Supplies

Mr. Terry Davis: asked the Secretary of State for the Environment what action he is taking to improve the supply of building materials in North Worcestershire.

Mr. Eyre: Some building materials are overall in short supply and I am keeping in close touch with the manufacturers and their associations to ensure that everything possible is done to meet current difficulties. I have no evidence of any particular problems in North Worcestershire.

Mr. Davis: Is the Minister aware that the building trades employers in North Worcestershire have expressed concern about the shortages, especially of bricks and steel, and about the rationing system which British Gypsum has imposed on the supply of plasterboard? Will he talk to British Gypsum?

Mr. Eyre: The hon. Gentleman will appreciate that there has been a great upsurge of demand in the construction industry, and output in the first quarter of 1973 is about 5 per cent. higher than the 1972 average. There are areas of difficulty, some of which the hon. Gentleman has mentioned, but in all those cases, with the exception of steel and timber, where difficulties arise because of high world demand manufacturers are arranging for an increase in productive capacity, and the benefit of that will be seen in the autumn.

Mrs. Renée Short: What research is being carried out in the Department into substitutes for materials which are in short supply and materials which are expensive and add considerably to the cost of houses?

Mr. Eyre: My Department is in constant touch with the industry on this matter, which is of increasing importance against the background of difficult supply.

Driving Licences (Delays)

Mr. Coleman: asked the Secretary of State for the Environment how many complaints he has received concerning delays in executing requests for driving licences by the new motor vehicles licensing office at Morriston.

Mr. Peyton: A distressingly large number.

Mr. Coleman: It is obvious from that answer that the right hon. Gentleman is aware that there have been complaints and delays of as much as four months from this centre. Is he aware that these delays are causing considerable inconvenience to magistrates' courts, the police and defendants in cases at those courts? What does he intend to do to ensure that the delays are diminished as much as possible?

Mr. Peyton: I am very conscious of the inconvenience caused to many members of the public and I deeply regret it. By way of explanation, I merely say that the start of the operation at Swansea, which was always bound to be difficult, anyway, was unfortunately accompanied by an industrial dispute, and the work was seriously interrupted. I am very appreciate of the efforts that have since been made by the staff there to catch up and put things right.

A66 (Teesside Churches)

Mr. Sutcliffe: asked the Secretary of State for the Environment if, in response to correspondence he has had with the Churches Main Committee and the hon. Member for Middlesbrough, West, he will end the hardship suffered by two Teesside churches blighted by the A66 road development and make possible their reinstatement without further delay.

Mr. Graham Page: It will not be established for some time whether the site of either church will be wanted for the development. Acquisition at the present stage would therefore be premature, but I see no reason why contingency arrangements to reserve sites for new churches should not be made with the local authority.

Mr. Sutcliffe: I am grateful to my right hon. Friend for that helpful reply.
Will he, without prejudice to compensation in two or three years' time when this route for the A66 is finally decided, now write to the churches giving them his express authority to start negotiations, so that time may be saved?

Mr. Graham Page: I do not think that it is for me to give the churches authority. The Teesside County Borough Council has already reserved a site for the Thornaby Methodist Church. I hope that the other church will enter into negotiations with the local authority for the reservation of a site.

Motorways (Road Works)

Sir John Tilney: asked the Secretary of State for the Environment what arrangements he now proposes to make to avoid snarl-up on motorways when road works on such motorways are undertaken.

Mr. Speed: Maintenance work is undertaken so far as possible in such a way as to cause minimum interference with traffic, and after consultation with the police.

Sir John Tilney: Will my hon. Friend bear in mind that those of us who took an hour to go three miles on the M6 north of Lancaster during the Spring Recess think that if the police had placed notices at the intersections beforehand many motorists would have been able to get to their destinations much more quickly?

Mr. Speed: I am aware that it is not always possible to get this right. There are difficulties. A few months ago we issued further guidance because some very bad problems occurred on the M6 last year. On the whole we are getting this better, but before taking any action we must balance the safety factor.

Mr. Delargy: Does not the Under-Secretary deplore the use of the expression, "snarl-up"? I assure him that it will not be found in the Oxford Dictionary.

Mr. Speed: People who get involved in such delays get pretty snarly.

Mrs. Monks: May I call my hon. Friend's attention to the dangerous situation that exists at the junction of the M62 and the M6, just north of Chorley


and Leyland, and inform him, if he is not familiar with the junction, that five lanes of traffic suddenly have to go into three lanes and there is no roundabout to control the speed?

Mr. Speed: If my hon. Friend cares to write to me or to table a specific Question on the point, I shall do my best to answer her.

Sub-standard Housing (Control)

Mr. Frank Allaun: asked the Secretary of State for the Environment if, in the light of evidence submitted by the hon. Member for Salford, East, he will introduce legislation stopping the decontrol of all rented dwellings which lack a bath, hot water and inside lavatory and limit rent increases for all other dwellings in the private sector to 3 per cent. a year.

Mr. Channon: No, Sir.

Mr. Allaun: First, does the hon. Gentleman admit that so-called fair rents for private tenants have, on average, trebled the previous controlled rent? Secondly, did not my evidence include the case of an elderly couple living in a house without even an inside water supply—the water had to be supplied by a hand pump outside—who had their rent increased 3⅓ times? Will he consider the Labour Party's proposals mentioned in the document?

Mr. Channon: In the case the hon. Gentleman sent me, which of course I have studied, he overlooks the effect of the rent allowance. In the case of a retired couple living on the old-age pension and at present paying £1·49 per week in a controlled rent, if the new rent rises to £5·08 the effect after receipt of the new rent allowance would be that the couple's rent would actually reduce from £1·49 to 19p per week.

Mr. James Lamond: Is not the hon. Gentleman aware how important it could be to limit rent increases in all sectors of housing? Will he study the very first report that has been received from a rent scrutiny board, which has examined rents in my constituency and has instructed the local council to increase rents of council houses by as much as 250 per cent.? Is not this a matter about which the Government could take positive action

in an effort to help if they wish to persuade wage earners not to seek high wage increases? If the Government were to impose a freeze on council rents for the next three years it might help their policy.

Mr. Channon: The Question tabled by the hon. Member for Salford, East (Mr. Frank Allaun) relates entirely to rents in the private sector. I am aware of the point that the hon. Member has just raised with me, because he sought to raise it in another way. That is a matter not for me but, by law, for the rent scrutiny board. I understand that in the case the hon. Gentleman has in mind the board has made a report to the council disagreeing with its provisional assessment. The council has some time in which to make representations.

Mr. George Cunningham: Does the hon. Gentleman acknowledge that over the last few years one of the great disappointments in housing has been the failure of landlords to take advantage of generous improvement grants to install bathrooms, inside lavatories, and so on? Would it not be a marvellous encouragement to landlords if they were not able to take advantage of decontrol until they had installed the basic amenities with the help of the generous financial assistance that is available?

Mr. Channon: I am convinced that the generous financial assistance which is available is one of the best spurs to the improvement of property. Properties that are in a had state will have very low rent assessments.

Oral Answers to Questions — Tyres (Tread Depth)

Sir G. Nabarro: asked the Secretary of State for the Environment whether he has studied the effect of the 1 mm tread depth legislation standards of tyres in the United Kingdom; whether he is aware that foreign countries including the United States of America, statutorily require up to a minimum of 1·59 mm tread; and, having regard to safety considerations of tread depth at the minimum of 2 mm, whether he will introduce legislation to that effect.

Mr. Peyton: I have no evidence to suggest that such an increase would have a significant effect on accidents.

Sir G. Nabarro: Does not my right hon. Friend recognise that probably the largest single area of road accidents is caused by faulty tyres, and that the United States of America has long recognised that by imposing a minimum depth of tread of 1·59 mm, which is nearly 60 per cent. greater than that extant in the United Kingdom? As it has proved entirely successful in the United States, why could not we benefit from its advanced technology?

Mr. Peyton: I should be the last person to deny the importance of good tyres for the motorist. They represent his only contact with the track. It is very important that the tread should be in good condition. On the other hand, I doubt whether much would be gained from imposing a fairly considerable extra cost on the motorist, as my hon. Friend has suggested.

Mr. William Hamilton: Are there any statistics in the right hon. Gentleman's Department to show how many accidents are caused in this manner and how many are caused by people driving round roundabouts the wrong way?

Mr. Peyton: They are not as precise as I am sure the hon. Gentleman would like them to be.

Oral Answers to Questions — Building Land (Cost)

Mr. Ashton: asked the Secretary of State for the Environment what is the average cost of an acre of building land in north Nottinghamshire today compared to June 1970.

Mr. Channon: I regret that the information is not available for north Nottinghamshire.

Mr. Ashton: Is it not a fact that the price of land has doubled'? The Minister admitted earlier today that the cost of houses has risen by 87 per cent., yet in that period wages have risen by only 30 per cent. Will the Minister tell my constituents how they can be expected to pay this extra cost, particularly as more of them are having to buy houses because councils are building fewer? Have not these people become worse off in the last three years?

Mr. Channon: The hon. Gentleman asked me a Question about Nottingham-

shire. I am afraid that I do not have the figures for that county, because they have not been given to me. I can, however, give figures for the east Midlands, which may be of assistance. The figures are as follows: in 1969, £4,800 per acre; in 1972, £9,290. I emphasise that the figures that I have given the House for the prices of housing land are related largely to transactions that have a built-in time lag up to four months, and the figures that I have given to the House are considerably out of date.

Mr. Molloy: When land becomes available for local authorities that have a very good use for the land but are often financially inhibited in making good use of it, will the Minister be prepared to see representatives of those local authorities and consider how they can be helped?

Mr. Channon: I should like to study the hon. Gentleman's proposals. If he has a specific case in mind, perhaps he will get in touch with me.

Mr. Allason: Does my hon. Friend recall that local authorities have been telling him that there is plenty of land available for housing? 'Does not the rise in the cost of land wove that these statements are totally false and that there is a need for a much greater amount of land to be made available for housing?

Mr. Channon: I certainly think that it is essential to release a considerable amount of land for housing, particularly in pressure areas. I hope to have the support of the House when the new planning guidelines are received.

RENT SCRUTINY BOARD (REPORT)

Mr. Frank Allaun: I beg to ask leave to move the Adjournment of the House under Standing Order No. 9, for the purpose of discussing a specific and important matter that should have urgent consideration: namely
the first announcement in the country by a Rent Scrutiny Board of its decisions regarding the rent increases for council houses which show a doubling of rents in that area".
It is specific because I have with me, as has my hon. Friend the Member for Oldham, East (Mr. James Lamond), the first report of the Rent Scrutiny Board.
it is urgent because the Department of the Environment will not be available for oral Questions until October.
Lastly, it is important because it has national significance. If this goes through, it gives 5½ million council tenants and their families a foretaste of what is in store for them, which is that, on average, council rents will be more than doubled under the Housing Finance Act. According to this document, many modest two-bedroom houses in Lees, near Manchester, are to have an increase of about £22·5 a week, and some will be raised three and a half times.
Finally, the matter is important because this indicates a pattern for the whole country. If this transpires, there will be national unrest certainly affecting the attitudes of trade unions to wage claims, and it will be recognised as a deliberate and unnecessary increase in the cost of living.

Mr. Speaker: I am grateful to the hon. Member for having given me notice before the appropriate hour of the matter which he has sought to raise. I have considered carefully what he has said, and my decision does not reflect at all upon the importance of the matter which he has raised. It is simply whether I should disrupt the business today or tomorrow—which is, indeed, an Opposition Supply Day with two topics already chosen for debate—to give the matter which he has raised priority. I am afraid that I cannot give it that priority.

EDUCATION (STATUS OF DEGREES) BILL

3.33 p.m.

Mr. Thomas Cox: I beg to move,
That leave be given to bring in a Bill to regulate the granting of authorised degrees and other academic qualifications.
May I express my thanks to my hon. Friend the Member for Eton and Slough (Miss Lestor) and also to Mr. Lyndon H. Jones, the Principal of the South-West London College in my constituency, for the efforts which they have already made in exposing the abuse of bogus education degrees.
Bogus degrees and the organisations which supply them have existed for a long time. One can trace their existence in the United States of America through to the last century. Such has been the growth of these organisations and the money that they have been making, the equivalent of between £20 million and £25 million a year, that laws have had to be introduced in many States to curb these activities, and because of the tightening up of legislation in the United States of America one has seen the growth of these supposed education colleges in this country.
The methods followed by these organisations are at times almost beyond belief. It is possible to obtain supposed qualifications in virtually any subject. I could obtain a most impressive certificate stating that I have studied and obtained a degree or diploma in subjects as varied as hypnotism, estate agency and valuation, accountancy, chiropody, agriculture, in any of the arts and sciences, diseases of the ear, nose and throat, or as a minister of religion, to name just a few, but sufficient to indicate the potential danger which could face anyone who unsuspectingly sought to use the services of someone who was practising in such subjects by reason of using bogus degrees.
It may be asked who would have the nerve to buy such a degree and then seek to use it. Many people would, and in fact do. In one case a man was put in charge of a group of psychologically disturbed children. In another case a position on the staff of an overseas embassy was obtained by such a degree.
One may equally ask why people apply for such degrees. Often, no doubt, it is to flatter one's ego but it is very often because people genuinely believe that these organisations are colleges of education, and this view is strengthened because of the recognised high standards of British education, the belief that this country would not allow such despicable methods to be followed here, and also because a person who genuinely wishes to further his education, if possible by obtaining a qualification, is misled into accepting the authenticities of these organisations. Who could blame them when these organisations are called the University of Winchester or the Sussex College of Technology? Consider for a moment the similarity of the name with that of the genuine Sussex University.
I understand that there are now 30 of these organisations operating in this country and they are making a great deal of money. Bogus degrees can cost anything up to several hundred pounds each, and the people who run these organisations have been doing so for a very long time. To name just a few, we have Mr. Charles Brealy, who calls himself an archbishop of the Old Catholic Church of England. There is a Mr. William Duncan, of University House, Coventry, who, I understand, specialises in medical degrees; a Dr. Bruce Copen, who is Dean of studies at Sussex College of Technology. Let me say that he is a doctor of nothing. We have Mr. Lloyd Harris of Newport, Monmouthshire, who granted a degree to Oliver Greenhalgh in the English Association of Estate Agents and Valuers. On the certificate that Oliver Greenhalgh received it is stated that he had been engaged in the work of estate agency for the period required by this association, and that he had satisfied the council as to the thoroughness of his knowledge of estate agency and valuation subjects. The only problem for Oliver in pursuing his profession was that he turned out to be a cat.
To some people this may seem amusing and even farcical, but it is a serious matter. It is serious because these people are committing no offence even though I describe them as crooks because they obtain money by deception. In spite of repeated attacks by education authorities,

condemnation by the Robbins Committee on Higher Education, and the views expressed as long ago as 1960 by the vice-chancellors, nothing has been done to stop these people from selling bogus degrees.
In May this year the Department of Education and Science published a list of approved organisations whose degrees or diplomas are acceptable to the Department. However, it left out other organisations of which I would make no criticism and which I believe should have been included in its list. It did nothing whatever to outlaw the granting of bogus qualifications, hence the reason for my Bill. In it I propose that no organisation would be allowed to operate in the United Kingdom unless it was approved and registered by the Department. Anyone who sought to sell such qualifications would be liable to prosecution and, if convicted, to a minimum fine of £500 and on subsequent conviction to a minimum fine of £1,000.
I totally reject the argument that legislation will be difficult to introduce. I cannot believe that the Robbins Committee would have recommended legislation had it not been perfectly clear to it that it could be introduced and enforced. Other countries have done this and even a small country such as Hong Kong has passed legislation. I suggest therefore that this country could do it, too, and that we should do it as quickly as possible.
I have outlined why legislation should be introduced and I hope that the Department of Education and Science will support my Bill. My hon. Friends and I intend to use every opportunity we have to press the Government to outlaw these despicable practices, which benefit only those who seek to make money while bringing discredit to our educational standards. The time is long overdue for legislation.

Question put and agreed to.

Bill ordered to be brought in by Mr. Thomas Cox, Mr. Roy Hattersley, Miss Joan Lestor, Mr. Roland Moyle, Mr. A. W. Stallard, Mr. Kenneth Marks, Mr. R. C. Mitchell, Mr. Michael Cocks and Mr. Frank Hatton.

EDUCATION (STATUS OF DEGREES)

Bill to regulate the granting of authorised degrees and other academic qualifications, presented accordingly, and read the First time; to be read a Second time upon Friday 20th July and to be printed. [Bill 189]

Orders of the Day — FINANCE BILL

Order for Third reading read.

3.44 p.m.

The Chief Secretary to the Treasury (Mr. Patrick Jenkin): I beg to move, That the Bill be now read the Third time.
By the standards of recent years this Bill has not been a heavy one and the Committee and Report stages have been less onerous than those we had become accustomed to. Nevertheless, it is right as we come to the Third Reading that, speaking from this Dispatch Box, I should say a few words about the main provisions of the Bill as they have emerged from Committee and Report and also very briefly and in accordance with precedent, comment on the general economic context in which the Government are asking the House to pass this Finance Bill. I shall also have one or two questions to put to right hon. Gentlemen opposite——

Mr. Joel Barnett: Answer some yourself.

Mr. Jenkin: —and the House will look forward to learning their answers. [Interruption.]
I start with VAT. When I moved the Second Reading of the Bill, on 2nd April—the day after VAT came into operation—I said that the introduction of VAT and the disappearance of purchase tax and SET marked a revolution in our indirect tax system. None the less, I expressed a cautious optimism that this major change would be effected without serious difficulties. Some hon. Members opposite, particularly the hon. Member for Heywood and Royton (Mr. Joel Barnett), gave vent to dire prophecies of disaster.
VAT has now been running for little over three months and we can begin to form a view as to which of us was right. So far from disaster, the House will, I know, be glad to acknowledge that the changeover has for the most part gone extremely smoothly. Businesses have quickly learnt how the tax works and almost all have adapted themselves to it


successfully. I have no doubt, of course, that here and there there are still problems which require attention, and I expect we shall hear something of them today. One reason for this smooth changeover was that traders had plenty of time to prepare for it. The intensive and prolonged consultations which took place before last year's legislation was introduced were invaluable in ensuring the minimum of difficulties for the many hundreds of different trades affected by VAT.
The Customs and Excise was given a massive task, and it is certainly my experience that traders who have sought its help and advice are, for the most part, full of praise for the officials of that department.

Mr. Denis Healey: Will the right hon. Gentleman comment on the report in today's Daily Telegraph in which a Customs officer told the reporter that he is not surprised that many small business men and traders are packing up rather than attempting to master the intricacies of the new tax system?

Mr. Jenkin: I am happy to say that the Treasury does not form its policy on the basis of tittle-tattle from individual unidentified Customs officers. I am sure the right hon. Gentleman has had said to him, as no doubt many of my hon. Friends have, that there is high praise for the work of the local VAT offices in helping through the introduction of this tax, and I should not want anything that the right hon. Gentleman says to detract from that.
It is a reflection of the very thorough way in which the VAT legislation was prepared and scrutinised by the House last year that there is relatively little about VAT in the Bill. The main change provided by it is the relief for tax-paid stocks held at the commencement of VAT; there is no doubt that this relief was widely welcomed by the retail trade. Otherwise, the only changes are minor technical changes of machinery. One cannot but help contrasting all this with the introduction of SET. In the words of the Leader of the Opposition, then Prime Minister, on 11th May 1966:
SET has crude and clumsy implications, but these will be relined in time. I think SET may survive and indeed will prove to be a

tax of not inconsiderable elasticity of application and yield.
I have no doubt that my hon. Friends will certainly agree that it was "crude and clumsy". As for "elasticity of yield", perhaps that was correct because the Labour Government doubled the rate of SET twice. But "survival"? No. There was never any chance of the survival of SET, for even in the year in which it was introduced its successor was already on the stocks. Curiously, it was in that same speech to the Press Gallery that the right hon. Gentleman told the world that the Labour Government were studying VAT.
Perhaps it is partly due to the Labour Party that after the 1970 General Election Customs and Excise was able to move so swiftly into top gear with the preparation of the tax, and we should like to express our thanks to that department now.

Mr. Tam Dalyell: Will the Chief Secretary complete this happy picture by giving a comparison of the costs of collection of SET and of VAT?

Mr. Jenkin: If the hon. Gentleman will put down a Question I will provide him with the answer, but I have not got the figures to hand at this moment. Of course, more revenue is produced through VAT without all the nonsensical discriminations by which SET was disfigured.
This brings me to my first question to the right hon. Member for Leeds, East (Mr. Healey). What would the Opposition do about VAT if the electorate were so unwise as to elect a Labour Government? The Labour Party has steadfastly and consistently opposed not only the details but the whole principle of VAT. The Opposition have voted against it on every possible occasion.

Mr. Speaker: Order. I hope that the right hon. Gentleman will excuse me for interrupting him. This is a Third Reading debate, and it is extremely limited.

Mr. Jenkin: I will not try your patience further, Mr. Speaker, but it will be within the recollection of the House that, on the whole, Third Reading debates of Finance Bills have been allowed some latitude on certain matters. However, I have posed the question, and no doubt the right hon. Member for Leeds, East will be able to give us the answer.
We have heard a great deal from the right hon. Gentleman about wealth taxes, property taxes, gift taxes and other taxes, but of the Opposition's views on VAT in future we have heard nothing.
I turn next to the Government's employee share savings scheme for which provision is made in the Bill and which my right hon. Friend announced in his Budget speech. There is no doubt that this part of the Bill has gained substantially from the very full discussions that we had in Committee; and, with the amendments which were accepted by the House last night, the scheme is a good deal more flexible and attractive than when the Bill was first introduced.
We have added the choice of an SAYE share option scheme. We have scrapped the complicated rules for reverse discounting for deferred payments under part-payment schemes. We have eased the rules about those who must be entitled to join the scheme for it to gain approval. All this will make it easier for firms to introduce SAYE share savings schemes and for employees to understand them. In addition, we have this year refined the share incentive and share option legislation which the House passed last year.
We are convinced that share schemes of all sorts have an important role to play in our economy, whether they be of the type appropriate for senior staff, executives and directors, or of the type appropriate for junior staff and shop floor workers.
On executive-type schemes I concede that we have not been able to meet all the criticisms that have been advanced, and, in particular, the Inland Revenue will continue to study the difficult problem of the unquoted subsidiary company.
I recognise and confirm, as I said last night, that there are often good grounds, wholly unconnected with tax avoidance, why the managers of such a company should be able to invest in that subsidiary company through a share option or share incentive scheme. But so far the difficulties have shown themselves to be formidable and seem to rule this out. While we have not been able to accept the proposals put to us by some of my hon. Friends, I shall be very happy to consider before next year any other constructive suggestions.

Sir Harmar Nicholls: Whilst the Chief Secretary is entitled to be congratulatory to his right hon. Friend, because it was a wise Budget, this and other matters in it leave a lot to be desired for the small trader and the unquoted company. I hope he will keep in mind that in future Budgets they deserve special consideration, which has so far been denied them.

Mr. Jenkin: I must take issue with my hon. Friend. I do not think he was in his place last night when we accepted a new clause specifically intended to help the small trader and meet one of the central recommendations of the Bolton Committee on form-filling. I am sure my hon. Friend welcomes that.
The share savings scheme is open to the unquoted company, the small family company, just as it is to every public company. The problem to which I was referring relates to the unquoted subsidiary which is owned by a parent company.
Reverting to the SAYE share savings schemes, I must confess that the initial reception of my right hon. Friend's proposals was disappointing, but I should like to express our thanks to all those whose advice and criticisms have helped us to produce the more satisfactory package which is now in the Bill.
When this Bill becomes law we shall have on the statute book, for the first time in this country, a legislative framework which will give the shop floor worker a real opportunity to acquire a stake in the company for which he works on advantageous terms and without risk to his savings up to the point at which he becomes a full shareholder. I hope that as soon as it becomes possible, in the context of our counter-inflation policy, many companies will feel it right to take advantage of this legislation.
But let me make it quite clear that we recognise that the scheme is not necessarily suitable for all companies. There may be firms which feel that their objectives of creating good and harmonious employee relations may be more satisfactorily achieved by other means. It will certainly be no reproach if they decide not to introduce a scheme of the kind provided for in this Bill.
Furthermore, I hope that in time we may be able to develop other ideas to cater for employees in different walks of life—in the public service, in the nationalised industries, and for those who work for non-corporate employees.
There is much talk today about the need to involve employees more with the conduct of the firms for which they work, and there are many routes by which this objective may be achieved. I believe that share participation or asset formation, as Eric Wigham described it in The Times a day or so ago, is by no means the least important.
Perhaps I may be allowed to put a second question to the Opposition. Would they intend to keep the SAYE share savings scheme, or would they scrap it? They have already condemned the executive-type share savings and share incentive scheme—more's the pity! But last night when I asked the hon. Member for Dudley (Dr. Gilbert) whether the Labour Party would scrap the SAYE type of scheme there was a deafening silence. We look to the right hon. Member for Leeds, East to inform the House today where he stands on this issue.
Finally, before I sit down I want to make a few more general remarks about the economy and about the Government's economic policy of which the proposals in this Bill form part.
In his Budget speech the Chancellor said that the main aim of our policy is to sustain a high rate of economic growth. Last year the economy was set on a course of 5 per cent. growth at an annual rate over the 18 months up to the first half of this year. This year's Budget was designed to maintain that growth rate up to the first half of next year. The latest figures show that the economy is growing broadly in line with those forecasts and that we are achieving our growth objectives.
Over the past 18 months the economy has been based largely on a rapid rise in consumer spending, and this was essential both to cut unemployment and to stimulate production and investment. These aims are now being achieved.
Unemployment has fallen sharply—down by 300,000 since March 1972, which I am sure is welcomed on both sides of the House. Since the second

half of 1971 industrial production has been rising at an annual rate of about 8 per cent. Investment is now rising strongly and all the surveys of the Department of Trade and Industry and the CBI and of the Financial Times indicate a considerable rise in investment during the rest of this year, and continued strong expansion next year. Engineering orders are at a very high level and on a rising trend.
Exports, too, are growing strongly. Indeed, the volume of exports this year has risen faster than we expected at the time of the Budget. The volume of exports in the first five months of 1973 was 12 per cent. over the level in the second half of 1972. Although imports are also rising, it is important that the volume of exports is rising at about twice the rate of the volume of imports. That is a trend which I am sure everybody welcomes.

Mr. J. Bruce-Gardyne: My right hon. Friend has pointed out that last year consumer expenditure had risen rapidly. He pointed out that from here on it looked as if industrial investment and exports would rise rapidly. Presumably the implication is that there would be rather less room for the rate of growth in consumer expenditure to be maintained. Can my right hon. Friend give the House any indication of how the Treasury expects that change to come about?

Mr. Jenkin: My hon. Friend has anticipated my next remarks. I was about to say that there has been a lot of talk about a danger of overheating. I think it is to that to which my hon. Friend is adverting. Despite the faster growth and despite the gloomy forebodings of certain commentators, the evidence as a whole does not point to overheating. We believe that the margin of slack in the economy is sufficient to maintain these faster growth rates for some time yet.
The level of unemployment remains high by historical standards and the rate of fall has begun to slacken. Although the level of unfilled vancancies is also high, it is our view that ample resources of labour are available to enable us to achieve our growth objectives without running into major shortages. Manufacturing capacity, too, still leaves room for substantial growth.
I now turn to the balance of payments. We always foresaw that the rapid rise in demand would lead to a substantial rise in imports and for a while a deficit on current account. That has been seriously exacerbated by the unprecedented rise in world commodity prices. Although we expect that the rise will abate, it will be some time before the faster growth of the volume of exports offsets the rise in import prices. We can therefore expect—we do not need to be unduly despondent or anxious about it—several more months of current account deficit before the position improves.

Mr. Douglas Jay: Can the right hon. Gentleman tell us whether the growth in the payments deficit has been, like everything else, in accordance with the Government's expectations?

Mr. Jenkin: The rise in the price of imports and the extent to which the terms of trade turned against us were not forecast. I doubt whether they were forecast by the right hon. Member for Battersea, North (Mr. Jay). As I have just indicated, it is that turn which is one of the major factors in the current account deficit. I stress again that in the first months of this year the volume of exports has been rising at about twice the rate of the volume of imports. Furthermore, that is during a period when firms have been buying materials and machinery in considerable quantities to provide the resources for the faster growth and for the investment which we all welcome.
Our aim is to sustain the expansion of the economy. It is upon that that all else depends. Although there is no danger of overheating at the moment, we have already recognised that perhaps that could become a danger at a later stage and that strains on the economy might develop during 1974. That is why on 21st May my right hon. Friend the Chancellor announced his measures to moderate the rate of growth of public expenditure for 1974–75.
I now turn more directly to the question posed by my hon. Friend the Member for South Angus (Mr. Bruce-Gardyne). Rather like the dog that barked in the night, it is remarkable how little we have heard from the Opposition about

the statement made by my right hon. Friend the Chancellor on 21st May. Perhaps there are two reasons for that unaccustomed self-denial. First, unlike their exercises in cutting public expenditure, my right hon. Friend's package has been announced not to cut back the growth rate but so that it should be sustained. Second, it was no panic measure involving cutting back contracts—[Interruption.] It took a long view, did it not? There was no cutting back of contracts in midstream. It was an example of careful foresight, with decisions taken in good time to enable them to have effect without major disturbance of key public expenditure programmes. The measures were taken to ensure that next year we shall have room for the higher investment, for the continued expansion of exports and for the reasonable rate of increase in personal consumption which faster growth implies.
I now pose my third and last question to the Opposition. We shall no doubt hear a lot of doom and gloom from the right hon. Member for Leeds, East about inflation, prices, sterling and other matters. But, given that the economy is now expanding rapidly, with both exports and investment surging ahead and unemployment falling, would the Opposition now take action to cut back demand? We are entitled to know their answer. Would they raise taxes?

The Chancellor of the Exchequer (Mr. Anthony Barber): It is what they did before.

Mr. Jenkin: If so, would they raise income tax or indirect taxes, or would they put additional tax on beer, petrol and tobacco? Would they reimpose credit restrictions? We are entitled to know their policy. They are putting themselves forward as a potential alternative Government. We are entitled to know what they would do. All these things, as my right hon. Friend said, are exactly what they did before, and the country is entitled to know whether they would do so again.
Our priority is to maintain the faster growth. The Bill carries forward the Government's policies for faster growth, for tax reform, for encouraging savings and for fostering wider share ownership. Those are objectives which command wide support in the House and in the country.

4.6 p.m.

Mr. Denis Healey: We are all delighted that the right hon. Gentleman the Chief Secretary is now training so assiduously for the role which he will shortly hold in Opposition. I shall have the greatest pleasure in announcing my first Budget from where the right hon. Gentleman was standing. From the remarks which you have addressed to the right hon. Gentleman, Mr. Speaker, you would probably regard me as being out of order if I opened my first Budget this afternoon.
I am not surprised that the Chief Secretary had so little to say about the economy and about the Bill. The Bill is now generally regarded as a lollypop mini-Budget. It is a Budget which is as unjust as it was irrelevant. For most people that is summed up by the fact that the right hon. Gentleman the Chancellor of the Exchequer chose to give £110 million to reduce the price of humbugs and candyfloss when housewives throughout the country were collapsing under the rising price of essential foodstuffs.
The Chancellor described the Budget four months ago as neutral. He readily confessed—and I do not blame him—that he was uncertain about how events would develop. He warned us that he would not hesitate to act if events developed in such a way as to require action. We had the first action a month or so later when he cut public expenditure by £500 million. We are, of course, still waiting for the real Budget. Most of us feel that that Budget is not likely to come until the autumn. We all hope that tomorrow's trade figures will not force action in the next few weeks before the House rises.
The basic dangers in the right hon. Gentleman's strategy are more obvious today than four months ago. The Bill is largely responsible for the fact that this year the Government have a borrowing requirement of over £4,000 million. That is equivalent, give or take £100 million, to the tax reliefs which the Chancellor is boasting of having made this year.
The right hon. Gentleman has made no cuts in public expenditure to offset the cuts which he has made in taxation. We heard this afternoon that the right hon. Gentleman the Prime Minister has

firmly decided, despite opposition from some of his Cabinet colleagues, to go ahead with the frivolous proposal for Maplin airport, evidence against which proposal is accumulating day by day as more experts have an opportunity to study the facts. The Government are now committed to spending another £30 million to subsidise the export of Common Market butter to the needy Russians who will then export it at a higher price to the even more needy Brazilians.
So far as we were able to understand it from the Chancellor's speech during the Budget debate, he plans to meet the Government's enormous borrowing requirement, which is totally unprecedented, by borrowing money from the British public at interest rates which have no precedent in our history. We all know that that is the main factor which threatens to force the building societies to raise mortgage rates up to and maybe beyond 10 per cent.
I gather that the right hon. Gentleman may have had some success in the pressure which he has exerted on the building societies during the last week or so. Can he give us any guarantee that if the rate does not go up to 10 per cent. this month it will not go up to 10 per cent. in August?
Does the Chancellor still believe that he has any chance now of bridging his borrowing requirement by raising savings from the British public when he knows that his prices and incomes policy—the Central Statistical Office has published the facts—has compelled people to use up their savings in order to maintain their standard of life and when the Page Report has shown that every man and woman who bought a £1 savings bond in 1970 is 13 pence worse off today?
The Chancellor cannot claim that the climate he has currently produced has any chance of producing savings on the scale necessary to bridge his borrowing requirement. Of course, if it does not do so, the enormous size of the borrowing requirement is bound to give a new boost to the rocketing prices from which the whole country is suffering and to increase tendencies towards over-heating in some sections of the economy.
The Chancellor told us repeatedly in March and April that he was confident that he could maintain a 5 per cent.


growth rate for a year or so. We were led to believe that he thought that we could continue to grow at 5 per cent. until at least next Easter. Does he still believe it possible to maintain growth at that rate through the winter in the economic climate which his Budget has produced?
It is well known to all businessmen, and patent from the Government's statistics, that there are most serious bottlenecks in the South-East region, and therefore, if the right hon. Gentleman wants to maintain growth at anything like the present level for another year or so, he will have to get increased activity in the regions. How on earth does he expect to do that when he has recommitted himself in the last few weeks to end the regional employment premium next years?
The second major threat to the Government's strategy is the balance of payments deficit. The complacency shown by Ministers in our debates last March did not last very long. So far this year, the balance of payments deficit has been running at the rate of about £800 million a year and we all noted that the Chief Secretary was careful to warn us that we were likely to get some very bad trade figures to follow, at least for the next few months.
How does the Chancellor propose to meet this deficit? So far he has sought to do so by borrowing abroad at second hand through public authorities. So far as I am able to discover—and the economics correspondent of the Daily Telegraph takes the same view—about 40 per cent. of our putative £800 million deficit this year has already been covered by public authority borrowing.
But the situation is changing fast. Interest rates in Britain are going down while interest rates abroad are going up. How does the Chancellor hope to persuade the public authorities to continue covering his deficit if they can borrow abroad only at higher rates than they get here? Will he solve the problem by rising interest rates in Britain once again?
We all know that the very disturbing trade figures and their effect on the balance of payments are the main reason for the fact that in recent weeks the £sterling has been falling in value, not only as fast as the dollar but even faster.
This devaluation, which reached 18 per cent. on a weighted basis last Friday, is directly related to the very disturbing performance of our balance of payments.
We are all glad to see that there has been some recovery in the parity of sterling—if that is a word one can use in a world of floating rates—in the last few days. But we are bound to suspect, after the communiqué issued on Sunday, that this may have been due to intervention by central banks.
There is no doubt that the Government are relying heavily on the fact that we now have a currency which is undervalued, as the Chancellor described it on Monday. This gives us a very substantial competitive advantage and I hope that our exporters will take the full benefit from it. But I am sure that the right hon. Gentleman will agree that none of his fellow finance ministers in EEC countries would allow him to join their float at a parity at which the pound was seriously under-valued.
I hope that we shall hear something later about the dog that did not bark in the Conservative night. Can we have a clearer statement from the Government, an undertaking that they will not join the Common Market float until inflation in this country is very much more solidly under control than it is? It is clear that, although the Common Market countries are continually pressing Britain to join the float, they will not allow us to join unless we have a parity at which the pound is not under-valued. If we went in at a higher parity, however, we could say goodbye to all our hopes of ever bridging the balance of payments gap.
But, of course, although the Chancellor sought to persuade the country a year ago that floating the pound was a painless device which had nothing to do with devaluation, I do not think that even the meanest intelligence—as the Chief Secretary called it—would hold that view today. The devaluation of between 15 and 18 per cent. from which the£sterling is suffering at the moment is responsible for about half the increase in import costs, which is one of the major causes of inflation in this country.
Although I know that economists differ on the precise percentage of a parity fall which is reflected in an increase in the cost of living, it is usually assumed that


about 20 per cent. is so reflected, so the Chancellor's devaluation by itself has added between 3 and 4 per cent. to the appalling increase in the cost of living in the last 12 months.

Mr. Bruce-Gardyne: Has not the right hon. Gentleman got himself into a circular position? He said earlier that the Government should not join the common float until they have cured inflation, and now he says that floating is contributing to inflation through raising import prices.

Mr. Healey: No, it is not a circular position. I believe that the hon. Gentleman takes some interest in these matters and I am surprised that he is not aware that in this unpleasant economic world in which Chancellors and even shadow Chancellors have to operate there are very often contradictory elements at work. We get some advantage from a fall in the rate in terms of foreign trade. We have no alternative to a fall in the rate when our balance of payments position is as bad as it was. But at the same time a fall in the rate brings great disadvantages in terms of inflation, and the central question, which I know the Chancellor is considering, is whether he can live through the down period in the J curve long enough to take advantage of the hoped-for upswing in the J curve when, as the Chief Secretary said, an increased volume of exports makes up for the increased price of imports.

Mr. Dennis Skinner: The Chancellor could jump instead.

Mr. Healey: Of course, and one great danger in floating down rather than taking one jump is that the psychological change in the behaviour of exporters and importers from slow continual adjustments is tiny compared with the change which follows a jump, and the J curve may turn out to be a U curve or even, as has been suggested, an L curve. But in such circumstances one never finds any benefit sufficient because throughout the whole process the parity is falling.
What concerns the country as a whole far more than these technical details of how a change in parity affects the flow of trade is the impact of devaluation both on the cost of living and on the pattern of earnings. The real earnings of the population go down because of the effect on the increase in the cost of living but the

earnings of industry go up because of the increased earnings from exports. What has emerged quite clearly in the past few months is the answer to a question we were all asking during the Budget debate—what is the hidden component in the Government's economic strategy, the key to the whole of their Budget?
It was put in a nutshell in a rather arcane way by the Permanent Under-Secretary to the Treasury, Sir Douglas Allen, who said that the Government were relying on what he called the
spontaneous effect of the changing price-wage relationship.
What does that mean in plain language? It means that the whole burden of paying for the Government's Budget deficit, of paying for the balance-of-payments gap and for the consequence of devaluation, is to be thrown on to the working man and his wife.
It is the deliberate policy of the Government to make room for investment and exports, which are desperately needed, by cutting the standard of living of the British people. The Government have been successful in this strategy this year. Since the freeze began last November prices have risen at the rate of over 9 per cent. a year. We had shocking news this week of new price rises on the way. The raw materials and fuels which we buy from abroad have already gone up 14 per cent. in the first half of this year. The price of manufactured goods is rising at the rate of 12 per cent. a year, the price of manufactured foodstuffs is rising at the rate of 24 per cent. a year.
We still have to accommodate the results of the further devaluation of the pound which has taken place in recent weeks. All this means that by the time phase 2 comes to an end in October the cost of living for men and women in Britain is certain to have risen by over 10 per cent. compared with when the freeze began in November last.
Yet the Government have made it certain, by the imposition of their wages policy, that wages cannot rise more than 8 per cent. During the whole of this period the nation's wealth has been rising by 5 per cent. and more a year while manufacturing productivity has been rising at a rate for which I believe there is no precedent in recent history.
Since the Chief Secretary put so many questions to me perhaps I might put one to him. In the Budget debate of 12th March he said:
We therefore reject the Committee's conclusion that our public spending over the next 12 to 18 months will constrain personal consumption to a rate significantly below that of total output. It just is not true."—[OFFICIAL REPORT, 12th March, 1973; Vol. 852, c. 912.]
If words mean anything at all then those words mean that the Chief Secretary gave an undertaking in March that over the following 12 months real earnings or real personal consumption would rise at the rate of 5 per cent. Does he maintain that today?

Mr. Robert Sheldon: Answer!

Mr. Patrick Jenkin: I was waiting for the right hon. Gentleman to answer my questions. In that part of my speech which the right hon. Gentleman quoted I was referring to the strictures of the Public Expenditure Committee about public expenditure. The hon. Member for Ashton-under-Lyne (Mr. Sheldon) is the chairman of the General Sub-Committee that made the report and he will know that that was the criticism which I was making. I stand by those words. He will know that I went on to say, in relation to public expenditure, that we would not hesitate to take action up or down if required. That is exactly what my right hon. Friend did.

Mr. Healey: The House will have an opportunity of reading again what was said then and it will note the wriggling of the right hon. Gentleman this afternoon. The conclusion to be drawn is that the Government have abandoned the undertaking which the Chief Secretary gave in March to maintain the increase in personal consumption at the same rate—or not significantly below it—as total output. The Chief Secretary knows as well as we do that there was no rise in earnings in real terms at the beginning of this year, although there was a small rise in personal consumption, financed entirely out of savings.
The Chancellor gave my hon. Friend the Member for Heywood and Royton (Mr. Joel Barnett) the answer to a very important question this afternoon when he said that real disposable income between the last quarter of last year and

the first quarter of this year did not rise but fell by a fraction of 1 per cent. The amount of the increase includes all incomes—that is, also including dividends, as the Leader of the Opposition pointed out yesterday, and we all know that dividends have gone up substantially in this period. That means that earnings from employment fell at the beginning of the wages-prices policy although employment was increasing. That in turn means that for the vast majority of people already in employment last November there was actually a fall in real earnings during the first six months of the freeze.

Mr. Piers Dixon: Many of my hon. Friends in the Conservative Party would agree that in recent months the standard of living has been on a slight plateau. Surely the Government's record should be taken in its entirety. Can the right hon. Gentleman say whether he would prefer to have the situation which existed under the administration of which he was a member, when the standard of living was going up at about 11 per cent. a year, or whether he would prefer the general record of the Conservative Party under whom the standard of living has been going up by 4½ per cent. a year?

Mr. Healey: I am glad that the hon. Member has asked me that because it enables me to comment on a claim which is increasingly made by Conservative Members at a time when standards of living are falling. They claim credit for a substantial increase in earnings during the first two years they were in power although they spent the whole of those two years trying to prevent that increase from taking place. They reversed the whole of their economic policy a year ago because their attempts to prevent the standards of life from rising had failed.
It is a bit thick for hon. Members to come along a year later and take credit for things that happened in the first two years of the Conservative Government when they happened in spite of every effort by the Government to prevent them. The question which the country wants answering—and I can assure the Chancellor that the TUC will ask him this when he meets it in a week or so—is, where is all the extra money going to?
If wage earners' living standards are falling and the nation's wealth is rising


by 5 per cent., where is the money going to? Some, thank God, is going into exports, and I pay tribute to all those firms and workers who have contributed to the substantial increase in the volume of our exports. I pray that they are even more successful. A large part of the increase has gone into profits. There was a 36 per cent. increase in profits during the period since the freeze. I noticed this week—and it is typical of many companies—that G.E.C. profits went up 55 per cent. when its external sales went up by only 5 per cent. In fact, from November to May profits went up four times faster than earnings.
If all those profits were going into investment in increased productivity, many of us would not complain too loudly. But that is not happening. There has been some improvement in investment in the last few months, but, as the Financial Times pointed out the other day, it is little more improvement than the upturn which has occurred in the same phase of previous cycles. There has been a substantial increase in bank lending, but the great majority of it has gone to individuals and property and financial institutions. Well over £1,000 million of bank lending has gone to property and financial institutions since the freeze. Despite the fact that the Governor of the Bank of England, on the Government's instructions as far as I can tell, asked the banks not to lend money so freely to property companies, between August last year, when he issued the instruction, and May, bank lending to property companies increased by £500 million—by more than it had increased during the previous 12 months.
The Prime Minister's repeated complaints when talking privately to directors are justified. The plain fact is that the profitability of British industry is substantially higher than that of many of our competitors, but the profits are not going into increased output or increased productivity.

Mr. Christopher Tugendhat: The right hon. Gentleman has referred at some length to the subject of profits. I wonder whether he would clarify his point for the benefit of the House. What proportion of the increased profits to which he has referred was earned abroad? Many of the large companies have substantial

earnings abroad. The right hon. Gentleman dwelt on what he regarded as the devaluation of the pound. He will know that a devalution tends to boost sterling profits. When he talks about profits, should he not break down the domestic element, the foreign element and the devaluation element?

Mr. Healey: The hon. Gentleman was not listening. I made precisely that point earlier. I said that one problem about devaluation was that it boosted profits at the expense of real wages. Some of the increase in profits must have come from exports, but I am no more able than is the hon. Gentleman to say precisely how much. What I am saying is that profits are not going into productive investment on anything like the scale at which our competitors are investing. That has been the central problem facing our economy for many years.
The whole of the Government's strategy depends on compelling working people to accept falling standards through an incomes policy in phase 3. It cannot work in the present situation, especially when the economy is overheating. The Chancellor of the Exchequer is putting on incomes policy a burden which it cannot possibly carry. Sir Frank Figgures has made this point again and again. When the nation's wealth is rising at 5 per cent. and the standard of living of working people is constant or falling, it is no good expecting any incomes policy, compulsory or voluntary, to carry the load which the right hon. Gentleman is trying to put on it.
The only hope for the Government is to redistribute income between rich and poor, between profits and wages, so that the economic system can be seen to be fair.

The Financial Secretary to the Treasury (Mr. Terence Higgins): A moment or two ago the right hon. Gentleman said that the economy was overheating. That is not what he said earlier. May we know which of the two statements reflects the right hon. Gentleman's view?

Mr. Healey: The hon. Gentleman, who is extraordinarily alert when listening, could not have been listening when I was speaking earlier. I said that there was overheating in parts of the economy, and I took the South-East as an example.
But I predicted that if the Government failed to bridge the enormous borrowing requirement—and I also predicted that unless there was a substantial increase in interest rates they would fail to do so—the overheating could get a great deal worse. I said that at the beginning of my speech. That is why the attempt to impose falling living standards through an incomes policy is doomed to failure.
We shall be discussing next week the proposals which the Labour Party would wish to make to produce a more just society. But, since it figured largely in our debates on Report yesterday, I return to a point which we on this side of the House take very seriously. A great deal can be done by the Government to help the poor, although there is no sign that they will do it. A great deal can be done to help the average family, although there is no sign that the Government will do it. But even that will not be enough unless the Government can correct the flagrant injustice of a situation in which the living standards, behaviour and way of life of the rich is not affected in any way by their policies whereas the wages and living standards of ordinary people are steadily ground down.
The Government should have introduced in the Finance Bill penal taxes on property speculation. I find it shocking that the right hon. Member for Taunton (Mr. du Cann) should have been able to make £30 million the other day by selling property which he had bought for a smaller price only 15 months ago. I find it quite extraordinary that the Chancellor of the Exchequer should have refused last night to accept an amendment which would not have changed our system of taxing foreign earnings but would simply have given the Inland Revenue information about foreign earnings. As he proposed to refuse the amendment, I was not surprised that in the whole of his speech he made no attempt to refer to the terms of the amendment or to justify its rejection.
There is one absolute precondition of any escape from the tragic inflation in which the nation has been plunged by the Government's economic mismanagement, and that is to change utterly the social attitudes with which the Government took office three years ago and to seek

to narrow rather than widen the gap between rich and poor. It is because the Bill moves in precisely the opposite direction that we shall divide against it on Third Reading.

Mr. Deputy Speaker (Sir Robert Grant-Ferris): Before I call the next speaker, I am sure that it would be the wish of the House that I should welcome at the Table the Clerk of the Legislative Assembly of the State of Victoria, Australia, Mr. Campbell. We welcome him to the Mother of Parliaments which shows the world the universality of parliamentary practice of the British Commonwealth.

4.38 p.m.

Mr. J. Bruce-Gardyne: After your intervention, Mr. Deputy Speaker, I feel that we are in danger of becoming over-parochial, because I want to return to the more immediate domestic issues to which the right hon. Member for Leeds, East (Mr. Healey) addressed himself.
I was very interested in what little indication the right hon. Gentleman gave of the strategy which he would recommend the Government to follow. As I understand it, the kernel of the strategy was that there should be a substantial and presumably immediate diversion of resources to the lower-paid and worse-off members of the community. That involves two things: first, a substantial and presumably immediate increase in the Government's borrowing requirement about the size of which the right hon. Gentleman expressed, I believe quite rightly, considerable concern, without adding further to it; and, secondly, a substantial and presumably immediate increase in consumer expenditure, although he argued that it was apparent that consumer expenditure would not be able to rise as fast as it had been rising in the past year.

Mr. Healey: That is the Government's strategy.

Mr. Bruce-Gardyne: I believe that it is true that consumer expenditure will not be able to rise as it has risen in the past year. However, I found it quite impossible, not for the first time, to reconcile both ends of the right hon. Gentleman's speech.
Before I go into further detail about the comments of the right hon. Member for Leeds, East, I hope that it will not come amiss if, even in his absence, I say something about my right hon. Friend the Chief Secretary. I well understand why he has had to leave the debate. I am sure that hon. Members on both sides are delighted about the elevation which has happened to him between the Second and Third Readings of the Bill. I very much welcome his elevation since it is richly deserved. Since my right hon. Friend's prime responsiblity is for the control of public expenditure, I like to think that it may help to strengthen his arm in that direction.
I wish to make a comment about one aspect of the Bill to which my right hon. Friend referred obliquely, namely its impact on the unquoted company sector. It brings into operation the imputation system of corporation tax. Last year and this year we urged the Government in Committee to take account of the serious effect of the changeover to the classical system of corporation tax on the unquoted company which is a small distributor. I do not want to elaborate further on the argument, but I wish to reiterate that these unquoted companies, which depend on their retained resources for future investment, are of vital importance in the economy—and most of all in the less central parts of the country such as the area which I represent.
I hope that in the provisions of next year's Finance Bill my right hon. Friend will be able to recognise the damage which the new system will do to those companies unless some alleviation can be arranged to mark the basic difference in nature between quoted and unquoted companies.
There is one further point in my right hon. Friend's speech to which I want to refer, and that is the introduction of VAT. I cannot pretend ever to have been a passionate devotee of this tax, for the reason that I do not like taxes which are extremely expensive to collect, and VAT is certainly that. However, I am sure my right hon. Friend is totally justified in what he said about the smoothness of the introduction of the tax and the tremendous co-operative effort in terms of the distribution system, particularly by the small shopkeepers. with the Customs and Excise. Both sides are to be con-

gratulated on what they have done to facilitate the introduction of the tax.
It would have better become the right hon. Member for Leeds, East if he had been prepared to acknowledge that all the wild talk and scaremongering which we heard from the Opposition Front Bench before the tax was introduced has been proved to be totally and utterly unjustified. I hope that when the hon. Member for Heywood and Royton (Mr. Joel Barnett) sums up for the Opposition he will seek to redress that omission. It is the least we can expect of the Opposition.
I turn to the matters to which my right hon. Friend addressed himself in his concluding remarks—and this was a matter to which the right hon. Member for Leeds, East devoted the majority of his speech—namely, the question of economic strategy. The right hon. Gentleman said that he anticipated that we should have the real Budget in the autumn. Well, I am not so sure. When we had the Budget in March, I confess that I shared the prediction of a number of my hon. Friends that we would be hearing from my right hon. Friend again before the Summer Recess. In a sense it might be said that we have already seen this in the public expenditure statement, although I must confess—and we must occasionally admit our errors—that at the time of the Budget I thought that we would be hearing something more drastic than that statement.
What has happened since then—and this is where the situation has changed—o is that, largely for some of the reasons advanced by the right hon. Gentleman about the impact of the floating rate, we have seen coming very much to the fore the elegant phrase of Sir Douglas Allen's about the spontaneous effect of the price-wage relationship. We have seen the invisible hand propelled upwards from the floating rate begin to have a significant effect on consumer expenditure because of the relationship between the rise in wages and the rise in prices. If this pattern is to continue, the danger of overheating in the economy in the autumn which the right hon. Gentleman seemed to predict might somewhat recede. There may be no need for an autumn Budget or for a further attempt to regulate the economy later in the year or the beginning of next year.
I wonder about the activities of another eminent former Treasury knight, Sir William Armstrong. It is clear that Sir Douglas Allen, in the elegant phrase to which I referred, demonstrated what perhaps has been the Treasury's expectation, but Sir William Armstrong seems to have wider responsibilities. I wonder what will happen if we are not to go for objectives in pursuit of the tripartite talks by way perhaps of achieving some of the purposes of which the right hon. Gentleman spoke. They will have a direct effect on public expenditure calculated to offset the impact of the floating rate of private consumption—in other words, they would be aimed at giving a stimulus to private consumption.
Whether one acts by raising pensions further, or by increasing family incomes supplement or by the establishment of guaranteed wage increases to compensate for rises in the cost of living, or threshold agreements, or whatever the system may be, the purpose presumably would be to ensure that the consequences of the floating rate were not reflected in a gradual tailing-off of domestic consumption.
I intervened in my right hon. Friend's speech to ask him whether it was the expectation of the Treasury that in order to ensure that there was room for further expansion of exports and for continued growth of manufacturing investment, there was expected to be some calming down in the rate of growth of private consumption to avoid overheating. My right hon. Friend shrewdly sidestepped that question, but insisted that there would be room for a reasonable rate of increase in personal consumption in the months ahead. I take it that the word "reasonable" means somewhat less than the rate which we have had up to now. If that is a correct interpretation, I only hope that the Treasury will be successful in discouraging any excessive enthusiasms for consensus politics on the part of Sir William Armstrong.
I turn to the one other element in the equation, which is the future of floating. The right hon. Member for Leeds, East reiterated, not for the first time, the vital need for the Government to continue to adhere to a floating rate and to refuse to rejoin the snake. I know that any suggestion of a case for the United Kingdom to rejoin the snake is

regarded as highly eccentric at present. I must confess that I harbour such eccentric views and that in recent weeks the thought has crossed my mind that the fashionable slogan "Carry on floating" might be in danger of becoming the title of the next Whitehall farce.
I welcome the Government's desire for an early return to the snake not only because I do not believe that we should underestimate the strains which the departure of Italy and the United Kingdom from the snake have placed on the coherence and solidarity of the Community but more fundamentally because I cannot help feeling that one of the ways in which we could help to abate not inflation but inflationary expectations would be to re-peg the pound in connection with the neighbouring currencies in Western Europe.
I know that at the present time that is a heretical thought. But when I heard my right hon. Friend the Chief Secretary saying that he had the expectation of a series of substantial visible trade deficits in the months ahead, I wondered anxiously how it was proposed that these should be financed. If it is proposed that they should be financed by drawing down on the reserves, well and good. But if it is proposed that they should be carried on the float, it seems to me that the domestic inflationary expectations must be expected to accelerate.
I also suggest that it is perhaps worth bearing in mind that as and when we return to the float, but only as and when we return to it, we can hope to benefit by the support funds which the Community has brought into being to sustain the float. I fully accept that these support funds are quite inadequate at the moment for the purpose. But in the spring my right hon. Friend the Chancellor of the Exchequer put forward far-reaching proposals for a real integration of the currency systems of the member countries. Even if it is not possible to go as far as this, a return by us to the snake combined with the provision of much more substantial support arrangements between the various members of the Community will leave us in a more comfortable position than we are likely to be in the months ahead if we continue to float.
I realise that this is a somewhat heterodox position to adopt. It amuses


me sometimes to see how those who were the most fanatical opponents of floating before 1971 suddenly have become its most fanatical devotees. I doubt whether there is a complete solution either way. But I cannot help feeling that we are beginning to see that some of the unpleasant consequences of multilateral floating which were predicted in many quarters before the Nixon measures of the summer of 1971 are beginning to look as if they will be borne out. I hope that we shall not necessarily continue to believe that salvation lies infallibly in continuing to float the pound.
The Government face an embarrassing dilemma. If the rate of growth in domestic consumption is allowed to continue to contract because of the impact of higher prices, we could be in for a difficult autumn on the industrial relations front. On the other hand, if we take action, whether through threshhold agreements or through additions to our existing public expenditure programmes which are likely to stimulate consumer demand once again, it seems to me that the rate of domestic inflation will soon be uncontrollable.

4.55 p.m.

Mr. Roy Jenkins: I hope that the hon. Member for South Angus (Mr. Bruce-Gardyne) will not worry unduly about introducing a note of heresy into the debate. There is a good deal to be said for a few heretical points, and I propose to raise a few myself before ending what I have to say.
This Third Reading debate provides a traditional July occasion, sometimes welcomed by the Chancellor of the Exchequer of the day but more often not, I suspect, to look at the progress of the economy in the three months since the Budget and to look at our general economic position. Clearly one extremely important aspect of that at present—and one to which I propose to confine myself today—is the international monetary position as it has developed over the past few weeks and the position of sterling, which has already been touched on from both sides of the House.
The rate is a little better in the first half of this week than it was at the end of last week. It will become clear from what I shall say in due course that I hope

that the improvement will be maintained and developed further. But clearly it is early days to predict. Certainly one would have expected some reaction in the way that it has taken place from the catastrophic events on Thursday and Friday of last week, and it would be rash to predict from what happened on Monday, Tuesday and the first half of Wednesday what the position will be in a week, in 10 days or in a month.
In any event, the degree of depreciation—this I suppose is the right word rather than "devaluation"—which has taken place is very substantial, even if we ignore last Friday's plunge. The present Chancellor of the Exchequer is the greatest depreciator of the currency, both internally and externally, that there has ever been in the history of the Treasury. There is no doubt that both those propositions are true. The right hon. Gentleman's record in this respect is peculiarly ironic in view of the remarks made by him to a lesser extent, by the Prime Minister to a great extent, and by the late Mr. lain Macleod in the period leading up to the last election.
I remember Mr. Macleod saying in one of our debates—I cannot recall whether it was a Third Reading debate on a Finance Bill—that one of the most invariable rules of political economy was that Labour Chancellors always devalued the pound and that Conservative Chancellors never did.
Even at that time that view was based on a somewhat selective interpretation of history, because it involved two slightly doubtful propositions. One was that Mr. Philip Snowden was still a Labour Chancellor of the Exchequer at the end of September 1931, and, secondly, the even more doubtful proposition that Sir John Simon in 1939 was, if not quite a Socialist Chancellor, at any rate a non-Conservative Chancellor, because he put through the great silent and forgotten devaluation of 17 per cent. a few days after we went into the war. That devaluation has always been omitted from all the calculations.
After that there was what was regarded as a massive devaluation, the Cripps devaluation of a nominal 30 per cent. in 1949, but coming ten years after the previous devaluation and having to make a vast readjustment for the effect of the


war on the whole economic balance. However, it is undoubtedly true that even the Cripps devaluation of 30 per cent. against the dollar was a smaller depreciation of the real value of sterling than has taken place during the last year under the guidance and control—if that is the right word—of the right hon. Gentleman.
In 1949, rightly and inevitably, we went down drastically against the dollar. Nearly the whole of the Western World went down, that is the whole of sterling area, the Commonwealth and Western Europe. It is doubtful whether, in weighted average terms, the devaluation of 1949 which had to accommodate the whole change in the world economic balance that had taken place as a result of the war years was as much as 15 per cent. as against the 18 per cent. that we reached on Friday and the 15½ per cent. that I think that we are at today.
Then, 18 years later my right hon. Friend the Member for Cardiff, South-East (Mr. Callaghan), after massive inherited deficits, went down by 14·3 per cent. Relatively few people followed us down then so the proportion of real depreciation was higher, but clearly not as high as 14·3 per cent. I guess that it was 12 per cent. to 13 per cent. against the 18 per cent. figure which the right hon. Gentleman reached on Friday, and the 15½ per cent. figure that he is at now.
But what the Chancellor has succeeded in doing in three short years after taking over with an almost uniquely strong balance of payments position is effecting the biggest depreciation that we have ever had. I do not know what the future is in this respect. Clearly there are grave question marks over it. Bearing in mind that that is what has happened, it must, as a matter of objective fact, be noted that the right hon. Gentleman incurred relatively little criticism, and I think one has to ask why that is so.
The reason is that the right hon. Gentleman is what I think I can best describe as a rather dainty depreciator of the currency. He does it rather on tiptoe, but he has done it on a massive and damaging scale. Second, and perhaps more important, the right hon. Gentleman has been protected by an excessive and widespread enthusiasm for the virtues of floating which, even if it be a euphemism for sinking, has seized

hon. Members on both sides of the House, most of the commentators outside and most of the financial experts over the last year or so. It has commanded a suspiciously wide degree of approval. Some have almost turned this highly capitalist mechanism of floating into the ark of the Socialist covenant because they think it has something to do with sovereignty—which is now also an ark of the Socialist covenant—and with independence of foreigners.
The same view is taken by the right hon. Member for Wolverhampton, South-West (Mr. Powell) because he thinks that it fits in with his highly arid and theoretical view of the world in which market forces play around freely. The Chancellor and the Prime Minister unite in agreeing with this proposition because it gives them a smokescreen behind which they can take damaging action without their having to erect one if that were done from a different point of view.
The reason for this is a delayed and perhaps natural reaction to the fact that up to 1967 we tried to defend a particular parity at too great a cost and for too long a period. That is undoubtedly so, and it is natural that one reacts against mistakes of that sort, but it is at the same time a mistake to over-react and that is what has been done in the general attitude towards floating. It has been prevalent in the country for a long time past. It may have been inevitable during the last year, and I am not sure that we can get out of it immediately, but the idea is nonsense that floating is a sort of philosopher's stone which one has only to possess in order to gain benefits without disadvantages, to free oneself from all economic crises, and to insulate oneself from most economic problems. Yet there has been a great deal of talk in this House and by commentators outside implying almost exactly that during the last year.
I believe that as a result of recent events we may be beginning to learn a little about the disadvantages that are involved. Clearly, there are great dangers and disadvantages in defending a parity that has become too high. That was the pre-1967 position. It was also the post-Smithsonian position. Clearly, the right hon. Gentleman fixed it at too high a level at the end of 1971. I do not for a moment think that he would dissent from


that now. It was too high for the sake of the balance of payments. It was again too high for the sake of the health of the economy at home. But the fact that one can and, indeed, did fairly recently have too high a level, does not mean that one can never go too low and I think that as a result of recent events we have gone too low from the point of view of both the external and internal health of the economy.
My right hon. Friend the Member for Leeds, East (Mr. Healey) mentioned the old business about the effects of devaluation being J-shaped. I am not sure how completely my right hon. Friend carried the House with him in that important exposition. It has nothing to do with my right hon. Friend the Member for Battersea, North (Mr. Jay) or with his configuration in any way. It is a simple proposition that if we devalue, things get worse before they get better, but the immediate effect is a worsening of the balance of payments position. One then hopes to round the corner and one hopes that the improvement will be longer and will take one further out of the worsening.
The essential point about floating is not that it has turned into an L-shaped curve. The real danger is that what is more likely to happen is that one gets J after J superimposed on the first J, rather like a series of still shots making up a moving picture, so that one never has the chance to get to the corner, let alone get to the upswing, because the moment one is coming to the end of the down swing of one J, because of the float, one gets another J and one starts another downward curve. This can go on almost indefinitely, so that one does not improve even one's balance of payments because one is always in the downward part of the J curve and one pays more for imports and gets less for exports. One therefore loses resources, and loses them without purpose.
One also clearly produces considerable uncertainty for those engaged in international trade and—perhaps most important of all—one adds substantially to the inflationary pressures at home. No one can doubt that the behaviour of sterling has led to this happening, and happening recently on a substantial scale.
It is no good the Government blaming import prices for all their inflationary troubles here at home, when their policy in relation to the management of foreign exchange has made this substantial contribution—not the whole contribution, clearly, but a substantial one—to turning import prices against us.
These are the direct effects upon us, but there are also the indirect dangers of a series of floats leading to a rather unplanned system, running around, as I ventured to say in a previous debate, not as a system but as a chicken with its head cut off. This is what we have in the international monetary world at the moment. We could, I believe, be nearer than some of us realise to international monetary chaos on a scale that we have certainly not seen in the post-war world with very severe effects on world trade.
It is certainly the case that floating does not insulate us, does not make us wholly independent—nothing can—of what happens outside this country. We were pretty frightened by our brief experience of being part of the snake in the tunnel. Leaving aside the snake for a moment, I believe that the tunnel is too narrow and too rigid for the present stage of European monetary development, but by recoiling from it as we have done we have not achieved real monetary or other independence.
By recoiling from the snake in the tunnel—I would not be in favour of going into the tunnel in present circumstances; on the whole, the tunnel is rather unrealistic, even for those countries which are in it—what we have inevitably done is to move ourselves into the wake of the dollar at a particularly unfortunate moment. We have become a small floating object attached to the dollar. When it goes down, we on the whole go down—not necessarily by exactly the same amount, but by approximately the same amount. When it comes up, as it has done for a couple of days this week, there is some relief for the pound, but the freedom that we have achieved is the freedom to be sluiced down by the backwash of Watergate.
This does not seem to me to be a considerable achievement from the point of view of the position of sterling or the independence of the British economy. This is not a moment when I want to be


too close to President Nixon's dollar, but this is precisely what we are achieving by the policy that the Government have pursued and the excessive protection from criticism which the over-enthusiastic acceptance of floating has given them.
Let us remember that floating down out of control is far more damaging for us than it is for the United States. The United States are still dependent upon imports for only 4 per cent. of their national income. The impact on their internal economy is incomparably less. They have veered on the whole, so far as they are in a position to take governmental decisions at present, between a policy of benign neglect and a neglect which is somewhat less benign so far as the dollar and its effect outside are concerned. We should be foolish to think that, in this position, caught in the backwash of the dollar, we are not more exposed than they.
For the moment, I believe, we probably have to continue to float. It is unclear exactly to what we could or should peg or at what rate, but it should, in my view, be the long- and not too long-term objective that we should go back to some system of fixed rates. In the meantime, floating should also be far more managed than has been the case in the past few weeks and months. In the jargon which has come to be accepted on this subject, I do not merely want the floating to be dirty. I want it to be filthy. If we are to go on floating, I want a great degree of intervention.
If one looks back over what has happened over the calendar month of June, one sees that it is an extraordinary criticism of the management of our affairs. In that calendar month, we added to our reserves by £106 million. They stood at the end at, I think, £2,716 million—an extremely high figure for the reserves. In itself, that is a very good thing, but during that same calendar month, the pound depreciated on a weighted average basis by over 3 per cent.—in one month alone—and we moved by the end of it to a devaluation of 14·1 per cent. since the Smithsonian Agreement—and we have, of course, moved a good deal further since.
There is a substantial chance that when one looks back from the perspective of a

few months or years ahead, June 1973 will stand out clearly as the month in which this Government lost the prices battle, as the month in which the Government, who were seen to be becoming near—nearer perhaps than seemed possible six months ago—to a real dialogue with the TUC, fell away from it and the hope disappeared.
It is a ludicrous mismanagement of our affairs, at a time when it is so crucially important to get some effective arrangement on the inflationary front, to have allowed depreciation of the pound by what is happening externally to the extent of a quarter of the 1967 devaluation—with all the arguments that we had about that—to take place quietly and almost accidentally, while at the same time, so far from using our massive resources in order to prevent that happening excessively, we were actually taking in reserves during that period. I do not think that anyone since King Midas has shown such misplaced attachment to gold—if it were the case that the reserves were primarily composed of gold, which they are not.
As the Chancellor said on Monday, we want some long-term reform of the system. I do not think that we really have a system at present. None of us has got used to living in a world in which the hegemony of the dollar, which persisted, on the whole so beneficially for all of us from 1944 onwards, has come to an end. But I do not think that one will effectively reform the system merely by what one could call technical studies such as have been conducted within the Group of 20 very slowly over the last year or so.
If the British Government wished to make an imaginative contribution towards dealing with what is becoming an increasingly menacing position, from both a monetary and a trading point of view, and because of the impact of this upon general political relationships in a wider political sense, they would be unwise to believe that we can merely seek our own salvation and find it through floating. I do not believe that we can find salvation on our own or that uncontrolled floating is the route to that.
We are almost exactly, now, at the 25th anniversary of the beginning of the Marshall Plan, when America to a very large extent put Western Europe on its feet and created a period of considerable


prosperity for the whole Western world. Twenty-five years later, we have a very strong Western Europe monetarily and a weak, battered, rather unself-confident and suspicious United States.
It would clearly be ludicrous to suggest a Marshall Plan directly in reverse by which we offered to support the standard of living of the American people. They do not need that. Their standard of living in absolute terms—in contrast with their general world performance and self-confidence—is still significantly higher than that of Western Europe. But the equivalent challenge today, compared with that of 25 years ago, is what the West as a whole—just as America helped battered Europe—can do for the developing and the poor world.
There is here a possibility by which some of the difficulties of the monetary and trading relationships between Europe and America could be subsumed and overcome and a great deal of help could be given to the developing world and world trade for the future could be effectively lubricated. That is if the excessive reserves accumulating in the hands of many Western banks were, by the development of the SDR system, to be turned into a large special allocation of SDRs going to the developing and the poor countries so we should consciously envisage a situation in which these countries could operate at a deficit, which is very desirable from their point of view. This would in turn mean that the majority of the developing countries, taken en masse, could have a surplus without beggaring each other's position, in which both the United States and Western Europe could have a surplus, because the countries which most need the help were running planned deficits financed out of a massive channelling of reserves on this scale.
This would help both in easing the future problem and by being a constructive and imaginative gesture on a scale comparable with the Marshall Plan 25 years ago.

5.22 p.m.

Mr. Nicholas Ridley: I had intended to say a few words about the Finance Bill. I hope that the right hon. Member for Birmingham, Stechford (Mr. Roy Jenkins) will forgive me if instead I talk about the eloquent

and moving speech to which we have just listened from him.
The right hon. Gentleman finds himself in curious company this afternoon, with my hon. Friend the Member for South Angus (Mr. Bruce-Gardyne) and Mr. C. Gordon Tether of the Financial Times, who are leading the van for a return to fixed exchange rates. Admittedly, floating has become popular—perhaps unnaturally popular. For better or for worse, I am one who has always believed in floating, and I still do. I still believe that it is absolutely right that we should continue to float for as long as possible.
The right hon. Gentleman described the Rake's Progress of the pound over the last decades and the many devaluations along the road which have brought us to our present parity. What he did not say is why these devaluations happened, why the pound has floated down over the centuries. The reason is partly that, as Governments always do, Governments have created too much money and inflated their domestic currencies, and partly that the production, investment, ingenuity and effort of the people has not been as great and as successful as those of some other competitors. While these factors continue to exist, we are bound to have to adjust the parity in relation to countries where the practice is different.
What this argument is about—this is where I begin to disagree with the right hon. Gentleman—is whether the discipline of having a fixed rate will impress upon Governments and upon people the necessity for so behaving that they make the rate for their currency justified. The right hon. Gentleman—we should all pay tribute to him for this—was the only Chancellor for many years who attempted to bring the Government's expenditure and revenue into something like equality.

Mr. Bruce-Gardyne: Because of the external disciplines.

Mr. Ridley: My hon. Friend says "Because of the external disciplines." But what happened to the right hon. Gentleman? He lost the election and he was upbraided by all his right hon. Friends for not having a give-away Budget in 1968 and 1969 upon which they might have won the election.
The general opinion is that unless one is prepared to be profligate and extravagant with Government expenditure, one will not be popular. But the inevitable conclusion is that if one is to be popular by being extravagant one will have inflation, and if one has inflation the value of the pound will go down.
I believe that discipline can come only from within. It will come only when a set of men are elected and take their seats on the Treasury Bench who have the support of the people and who put first the prevention of the dilution of the currency by creating money. Only then will this endless increase in prices and decrease in the value of money stop. Meanwhile, while we find it correct and expedient to continue to inflate—as so many people seem to find, though not myself; I believe inflation to be the greater evil of the two—so long as that happens, it seems better that we should allow the currency to take the strain.
We must not be surprised. There is nothing surprising about the 16½ per cent. devaluation since last June. It follows naturally upon the events, not only of the last few years—there is no point in making party points—but also from the tremendous pressure from hon. Members of the Opposition after the General Election to reflate, to do something about the regions, and to spend more money to increase the pace of the economy. The Government did that. The result is a 16½ per cent. drop in the value of the pound. Now hon. Members of the Opposition have the audacity to attack the Government for having done it.
We must realise that it is no good blaming other people for inflation, for the decline in the value of money. We all are to blame. Over the last decade I have heard the Gnomes of Zurich blamed, the speculators blamed and the trade unions blamed. Now I am told that it is the fault of the foreign farmers, of the harvests in Patagonia and Moscow. It is beyond me how this diverse group of people, of but moderate economic importance, can all successively have been at fault for the decline in the value of our money, but not us. Apparently we have done nothing wrong at all; we have simply sat here and taken it with a stiff upper lip.
It is such an obvious conclusion to draw that if we want to stop inflation the remedy is in our own hands. We must be supported by the people in taking the measures necessary to do it.

Mr. Bruce-Gardyne: I take entirely the arguments of my hon. Friend, and I share his dubiety. Would not he agree that at present, certainly, the way in which the pound is floating freely down, while not causing inflation, contributes to inflationary expectations and that, therefore, the anxiety of Sir William Armstrong and people like him to take action is justified?

Mr. Ridley: That is certainly true. I do not know which is the chicken and which is the egg. It is the expectation of inflation by foreigners which tends to make them mark the pound down. On the other hand, it is the fact that the pound is marked down by foreigners which causes inflation to be manifested by rising import prices. Perhaps the two are just two sides of the same coin. Until we persuade those who deal in our currency that we intend to make it a stronger currency, through our domestic and internal actions, they will continue to hold it speculatively.
I think that the right hon. Gentleman was on to a major fallacy in saying that the pound had been dragged down in the wake of the dollar. I do not see how. I do not see why. I do not see that there can be any connection between the value of the pound and the value of the dollar now that they are floating the one against the other. I will admit the coincidence that the movements have been roughly the same, but I suspect the connection, if there is one, is because the pound and the dollar are regarded as the weak currencies and the franc, the yen and the mark are regarded as the strong currencies. So in hunting to find the right parities people tend to move large sums of money against both the pound and the dollar at the same time. They may well be right. If that is what they think the pound is worth, who are we to tell them that they are wrong?
Who are these people who move these large sums? They are mostly the oil rich sheikhs and the Middle East oil countries. The right hon. Gentleman talked about underdeveloped countries


and ways in which we can help them. I wonder whether some of these underdeveloped Middle East countries with 80 billion dollars at their disposal could not help us a little. We are becoming the underdeveloped of the world and they are becoming the magnets which have the money.
The only way we can defend ourselves against them in the long term will be for us so to devalue the currencies which we have that their reserves become worth less. The only way for them to defend themselves against that is for them to buy up our real property and our equities so that they effectively earn our currencies. This is a big problem facing us.
The second fallacy of the right hon. Gentleman was that the fact that our currency is low—he seemed to think it was undervalued, as did my right hon. Friend the Chancellor—is in some way disastrous or bad. I do not see why. Surely it was the fact that the yen was undervalued for so long that led to the great Japanese export victory which distorted the Japanese economy to the point where it made it possible for the Japanese to undercut most of the civilised industrial nations with their exports.
If there is a disadvantage to be found in currency parities, it surely lies in having an overvalued currency, as the right hon Gentleman's predecessor, the right hon. Member for Cardiff, South-East (Mr. Callaghan), would testify after his long battle to defend the overvalued pound against the balance of payments crises which he suffered.
My belief is that if the pound is undervalued—it may well be that it is—the buyers and sellers of the pound may have got the value of the pound temporarily wrong themselves. The right hon. Gentleman seemed to suggest that the simple imposition of J curves one upon another led to everything going downwards. As the down strokes are stored up so are the upstrokes stored up. The one problem we do not face is a balance of payments crisis. I think we cannot have one. The problem we face remains inflation.
I have been diverted, Mr. Speaker, by the fascinating topic which the right hon. Gentleman introduced into our debate.
Would it be in order for me now to say a few words about the Finance Bill and then to sit down?
I thank the Treasury team for all the care and consideration they gave to the amendments both in Committee and on Report and for their very great readiness to listen and to accept arguments. We were a happy team both upstairs and downstairs. The only regret was that the Shadow Chancellor of the Exchequer has appeared so fleetingly to grace our debates. He is rather like the Duke of Plaza Toro; he leads his army from behind. He appears and makes a vituperative attack, leaves the Chamber, and takes no part in the reorganisation.
I want to leave two points in my right hon. Friend's mind about next year's Finance Bill. First, the near confrontation which occurred in Committee over the question of corporation tax for unquoted companies and for small companies is not yet properly resolved. I am not even sure after our debates what is the right answer. I know only that we have not yet arrived at the right answer. I hope that more thought can be given to that.
The second point which is lodged in my mind is that we have now got a first-class system of direct personal taxation of income. Hon. Members may argue about whether the rates are too high or too low, but I believe the system to be absolutely first class.
We have not got yet a first-class system of taxation of capital. I refer to the share incentive schemes. A worker can take an option on a share at 70 per cent. of the market value and perhaps sell it seven years later for 150 per cent., but he will he required to pay 30 per cent. capital gains tax on that increase when he comes to sell his share. This might well involve him in paying more tax than if he had taken the money in wages. Indeed, he may well find that he has not a gain at all because of the ravages of inflation.
Although I see the case for taxing windfall gains made by rich people, at the same time we are taxing the savings of small people which may be dwindling in real value due to inflation, as the Page Report has shown, and of any gain they can make to restore that real value we are taking 30 per cent. for the Exchequer.
This is the reverse of a fair taxation system, which should not be regressive. The better-off should pay more. In the case of capital gains, coupled with a 10 per cent. annual rate of inflation at which we are running, we have ended up in a situation which is not fair and which is not equitable. Those who are suffering are those who perhaps do not know and who perhaps are too old to take too much trouble to find out and perhaps are not at all well-off, yet their savings are being decimated by a mixture of inflation and capital gains tax.
I want my right hon. Friend to admit that inflation exists and to think deeply for his next Budget about the reform of the taxes on capital. They need not be thinking about estate duty now. Heaven knows that that was ripe for reform. There is a problem which can no longer be brushed under the carpet, because we all now know that inflation is taking place. We cannot pretend that it is not. It is a major abuse that the capital value of savings—I am not talking about the rich; that is a different problem; redistribution comes into that; I am talking about the savings of the less well off—is being decimated by this mixture of capital gains tax and inflation. I believe that that is the area on which the Government should concentrate in future.
I welcome the Bill. I thank my right hon. Friend for his courtesy in Committee and I hope that the Bill will contribute as another major building block in the massive and impressive tax reforms which this Government have carried out.

5.39 p.m.

Mr. J. Grimond: With some part of the theme of the hon. Member for Cirencester and Tewkesbury (Mr. Ridley) I find myself in considerable agreement. However, at least two points the hon. Gentleman made are liable to misunderstanding, to say the least of it.
First, the hon. Gentleman seemed to imply that the Government, by spending large amounts of money in the regions, had thereby contributed to a successful regional policy. I do not want to pursue this, but it is becoming more and more obvious that far too much Government expenditure is spent in the south-

east of England—we need think only of Maplin and Concorde—and does not go to the regions.
Secondly, the hon. Gentleman seemed to be saying that inflation is not the responsibility of Government: it is the responsibility of all of us. This is a very fine Christian sentiment. Something which is everyone's responsibility is no one's responsibility. I do not deny that it might be much better if the Government and other political parties adopted a different attitude from that which they have adopted, but hon. Members opposite, after all, have been elected as the Government and they must take the prime responsibility. It seems to me odd to say that the Government are totally free of blame for our condition when one looks back to what they said at the General Election, when they promised us all sorts of good things and in particular the containment of inflation and a stop to the rise in prices.
I think the main, and appalling, danger which faces the country is inflation. It is with that that the Finance Bill should be dealing, but unfortunately it does not deal with it. What we have to ask the Government is whether their policy is basically to contain inflation if they cannot stop it, or to catch up with it. I suspect that their policy is the latter because again and again when they are challenged from this side of the House about higher prices their argument is, "But incomes have risen faster". This means that they are content to see the pound constantly fall in value, and to my mind that is the way in which disaster will ultimately lie if it continues.
The pound has been losing value by over 7 per cent. per year, prices are going up by 9 per cent. on the average, and in some cases by 25 per cent., per year, and the rate may well accelerate this autumn. Such a rate, if it continues, will undermine any kind of free economy. More than that, it will destroy the pound as a store of value and it will therefore destroy all personal freely-made savings. Ultimately, by making inevitable all sorts of restrictions, of which we have already had some, it will undermine our free political society.
It is no comfort to me to be told that this is happening all over Europe. I accept that the chaotic state of European currencies is a contribution to our


present difficulties, but it is no solace to be told that the French and the Germans are suffering from the same disease. On the contrary, it makes it worse. If the economic crisis in Europe gets worse and becomes a political crisis, we shall be in a sorry state throughout the free world.
The Government have said again and again that their aim is to maintain a 5 per cent. growth rate plus the containment of inflation. I have no doubt that when these two objects clash, as they do, they abandon the containment of inflation. I have said again and again that I find the whole concept of growth rate somewhat suspicious. Any growth worth having must be growth in things which we think valuable. Statistics of things which go to make up the growth rate include alcohol, thalidomide drugs, weapons, packaging—anything which is made—but not women's work at home.
Further, it is the constant habit of the Government to ignore or play down the rôle of the supply of money in creating inflation. We have not heard a word about it today. Their view is that it is not the supply of money and credit, or deficits, which make for inflation, but it is the wicked people who use this money. It is like saying that if you are examining the shooting of someone, the gun is irrelevant because if the man had not pulled the trigger the gun would not have killed his victim. But equally, if he had not had a gun he would not have killed his victim either. I fail to see how we can contain inflation without taking a stronger grip on money supply and upon this £4,000 million borrowing requirement. There are other important steps which are necessary, too, but to evade the issue of the supply of money and credit totally cannot be right.
I am also amazed at the complacency of the Government. During Question Time the other day they said that they were proud of their economic record. It has been a disaster. The disaster started, not in June as the right hon. Member for Birmingham, Stechford (Mr. Roy Jenkins) implied, but when the Government were forced to abandon the whole of the policy upon which they fought the election. I am not at present saying whether the policy is right or wrong, but it was shattered and, with it, so was their con-

fidence. Since then, they have never had any policy.
The danger about inflation is that it feeds on itself and it becomes a way of life. Furthermore, it has become a way of life with Government approval. It is now statutory. There is to be a minimum inflation of 4 per cent. per year, and that means that it will rapidly rise to 10 per cent., and unless it is checked very soon it will be impossible to stop it.
The Government have abdicated from their responsibilities, and this is where I think the sentiments of the hon. Member for Cirencester and Tewkesbury are somewhat dangerous. I do not believe that an economic policy can be handed over to two Treasury knights, however eminent. It seems to me almost at the root of the political process to reconcile interests and to control the supply of money to the economy.

Mr. Ridley: I hope the right hon. Gentleman will not mistake what I hope was polite irony for an expression of my views. He should acknowledge that there has been no one more consistent in denouncing the high rate of creation of money.

Mr. Grimond: I do indeed acknowledge that. I said, though, that it is possible for him to be misunderstood, if not by his friends, possibly by his enemies.
There is this question of the floating pound upon which the right hon. Member for Stechford made an important and interesting speech with an interesting conclusion about the underdeveloped countries. I think the hon. Member for Cirencester and Tewkesbury had a point about some underdeveloped countries, but not all underdeveloped countries are enormously rich. Europe was potentially rich at the time of the Marshall Plan to which the right hon. Member for Stechford referred. I do not think floating the pound cures anything. It certainly relieves one of the traumatic experiences of devaluation, since they are becoming more and more frequent, but if we are gradually floating down a river and sinking, it may be of some value to have an occasional weir at which we have to pull ourselves together. As it is, we are gently disappearing out to sea—in a sort of maelstrom of wreckage from all over Europe. I cannot believe that this


is necessarily a superior form of hara-kiri though it may be more comfortable. But this may not be the moment to tie ourselves to such logs as are available because they do not seem to me very safe either. So for the time being we must continue to float.
In the Finance Bill there is nothing which contributes to the containment of inflation, or, indeed, to a more justifiable form of society in this country. It is a serious matter that, in spite of 5 per cent. growth rate, the standard of living for many people is not rising. I am profoundly suspicious of the statistics upon which the Treasury works. It tells us that there is still room in the economy for expansion. It may be so, but it is difficult to find. It is extremely difficult to get building done in parts of the country. It is difficult to fill all the vacancies which exist. I do not believe there is as much elbow room in the economy as the Government say there is. Therefore, there is a danger that with all the other contributory causes of inflation we shall have some definite overheating because we shall soon be up against the limit of our resources.
If the Government do not attach great importance to monetary policy, presumably their Finance Bill is the main instrument for controlling the economy. Yet I should have thought that they were only too right in saying, as they do, that its effects will be neutral—indeed, negative. It will make no contribution to solving the main problems which face us.
There are certain things in it of which my party and I approve. We are very glad to see the share incentive system. But I doubt whether incentives to invest are now great enough to make it possible to recommend to people to save large amounts of money or to invest them in the way suggested.
The Government must be condemned therefore not only for their measures but for their extraordinary complacency in their long and short-term outlook here and abroad. It is no consolation to be told that we are caught up in some sort of worldwide movement. The hon. Member for Cirencester and Tewkesbury referred to Mr. Tether's argument that the Government seem to be pretending as

their excuse that there is an inevitable disaster coming over the world. They have contributed to a great extent to the rising cost of imports. That is one of the inevitable effects of the constant devaluation of the pound. We are now part of Europe and we have our opportunities and responsibilities for trying to put the EEC into better order.
A great deal of the inflation in this country has been contributed to directly by the policies that the Government have avowedly pursued and when it comes to a clash between maintaining a hypothetical growth rate and maintaining the value of the pound it is the pound so far that has gone to the wall.

5.51 p.m.

Mr. Piers Dixon: I am glad to have the opportunity of following the right hon. Member for Orkney and Shetland (Mr. Grimond). It gives me an opportunity of addressing not only the House but also the right hon. Gentleman's distinguished colleagues who are on the bench with him. For one moment I thought that my neighbour the hon. Member for Cornwall, North (Mr. Pardoe) was about to desert us.
The right hon. Gentleman bewailed the fact that the Conservative Party had abandoned the principles which it had entertained at least in economic matters in 1970. They were economic principles with which he was no doubt then in broad agreement. On that occasion we believed in the free market economy and in 1973 we have largely abandoned it. It was abandoned because a free market economy works only if everyone obeys the rules. Unfortunately there are too many people who are not prepared to obey the rules and in such circumstances any Government, Conservative, Labour, or, indeed, even Liberal, must abandon such a profound belief.

Mr. Grimond: I thank the hon. Member for the compliments that he has so rightly paid to me and my party. I was saying that after abandoning their policy the Government have found no other. I did not particularly approve of their policy, but it was at least a policy. Now they have none. As for the free market economy, anyone who has been in politics for any length of time knows that in its nineteenth century sense it will not work and that in this country whatever


economic policy is employed there will be opposition to it. That is what politics is all about. To say that the whole nation will stand up and cheer about what is done would not be true even of a Liberal Government.

Mr. Dixon: It is a great pity that we have not had occasion to see precisely how a Liberal Government might operate in this country——

Mr. John Pardoe: Hear, hear.

Mr. Dixon: I was speaking only in an academic sense and——

Mr. Speaker: Order. This is a Third Reading debate. It is a narrow debate and I do not think that a Liberal Government should be brought into it.

Mr. Dixon: You are right to rebuke me, Mr. Speaker. There have been enough militant trade unionists effectively to make it impossible to operate a free market economy and that is why in 1973 the Conservative Party has abandoned its traditional policies. The right hon. Member for Orkney and Shetland accused the Government of not producing an alternative policy, but my right hon. Friends have produced an alternative which I suspect will be the economic view of the Conservative Party for many years to come, and that is one of limited State intervention.
The year 1973, the Budget and this Finance Bill have marked yet another watershed in the economy of this country and of the world. It is a watershed to which the right hon. Member for Birmingham, Stechford (Mr. Roy Jenkins) referred. For 25 years the United States and, to a certain extent, Great Britain have been the leading forces in the economy of the world. That position has now been reversed. There is a certain smug satisfaction particularly among the Germans and the French who almost relish that the United States and, to a certain extent, Great Britain, have come upon evil days economically. They should not forget that it was the United States and, to a lesser extent, Great Britain, who rescued the European economy immediately after the war in the same way that they rescued Europe politically and militarily.
This would be a good moment for everyone in this country to remind some of our new friends in Europe that they have obligations to us in the same way that we had obligations to them a generation ago.
There are certain respects in which a Conservative Government still possess firmly-held views and where there has been no shifting of ground. I refer particularly to the belief in economic growth. The right hon. Member for Orkney and Shetland said that he disputed some of the statistics but there can be no doubt that while the economy of this country has not grown as rapidly as the economies of some other countries in recent years it has grown more rapidly than it was growing five or 10 years ago.
I was interested in the remarks made by the right hon. Member for Leeds, East (Mr. Healey). According to him, it seems, if the Government do not attain a growth rate of 5 per cent. that is a point for criticism. On the other hand, he says, if they do attain a 5 per cent. growth rate, that is something for which they must also be blamed. Having been perhaps discourteous about our new French allies it might be appropriate for me to say "Cet animal est très méchant. Quand on l'attaque, it se défend." The English translation is more or less "You cannot win." The English is briefer than the French, which is one of the factors which distinguishes the English language from the French.
The Opposition want higher pensions, more hospitals and all the sorts of thing which the Chancellor of the day can produce, but he can produce them only if the national cake increases in size. It may be that in the last few months the standard of living of the average person in this country has been on a plateau. The right hon. Member for Leeds, East was eager to underline this fact. He was complaining about how monstrous it was that the national cake was increasing at 5 per cent. a year but that the average man did not see his real earnings increasing by a comparable amount. But we cannot take the figures for a few months. We must take the broad sweep of a whole Parliament during which a single party may have its effect on the economy.
Whatever the statistics show—I realise that statistics can be adjusted and made


to show different results—the standard of living of the British people under this Budget and the previous two Budgets of this Government has increased significantly faster than under the Labour Government.
Some of the remarks that I heard both yesterday and today lead me to wonder whether some of our beliefs in the standards of good behaviour in public life, particularly between right hon. and hon. Members in the House, have been as high as we might expect. There have been references of a personal nature to some of my right hon. Friends. There has been a lot of talk about tax avoidance. As I listened to some speeches—particularly the speech by the right hon. Member for Leeds, East—I wondered whether some right hon. Gentlemen opposite had ever looked into their hearts and considered their personal positions.
A lot of money is made by politicians and others from writing their memoirs. There are many ways in which politicians and others may have their tax liabilities minimised by judicious arrangement—of course, within the law. I should like to know whether right hon. and hon. Gentlemen opposite consider that it is proper for Members on both sides of the House so to arrange their affairs that they limit their tax liabilities.

6.3 p.m.

Mr. A. E. P. Duffy: The debate on Third Reading of the Finance Bill, as on Second Reading, has turned less on its content and structure than on its underlying strategy—a strategy that has been not merely national, but global. I want to concern myself with strategy and to take up the two doubts that I aired at the beginning of the Committee stage of the Bill when I asked whether the Chancellor was taking gambles, first, on growth and therefore on productive capacity, secondly, on our balance of payments, and, thirdly, on phase 3 of the Government's counter-inflation policy which seems now to be the basis for their major hopes of economic salvation.
Despite the Chief Secretary's seemingly complacent disclaimer today about overheating, I am sure that many lion. Members must have mounting evidence that corresponds to my own about increasing shortages of both labour and raw

materials and, indeed, of components and finished products.
A most incredible transformation has taken place in Sheffield, which is an important engineering centre. It seems no time since there was serious unemployment and idleness of local resources. Now 500 men are needed in the steel industry and 400 in engineering. Small tools, cutlery and silverware have 350 jobs, and building sites are short of 250 men, which ties in with what the right hon. Member for Orkney and Shetland (Mr. Grimond) said. There is also an unsatisfied demand for unskilled workers, which is making it difficult to persuade unskilled men to enter Government training centres, which have been all-too-slowly expanding to meet this type of situation if not this time, certainly the next time that it occurs.
The evidence that we have suggests that productive capacity has been growing earlier this year by 3½ per cent. a year, and in the first quarter of this year output was growing at 6 per cent. Thus, the economy has been growing at 2½ per cent. a year faster than the underlying trend in the growth of capacity. This obviously raises the all-important question: how long will it be before Britain's spare labour capacity is exhausted?
I turn now to the second doubt that I aired during the progress of the Bill—the effect of this and of kindred matters on our balance of payments. I want to take up what I thought was the all-too complacent attitude of the Chief Secretary when he referred to imports. It is no consolation to be told, as we were told by the right hon. Gentleman, that in volume terms imports have been rising less rapidly than exports. They include, moreover, not only higher-priced food and raw materials but finished manufactures which British firms have not been able to supply.
I want to refer to my own experience in Sheffield, but in doing so I am raising a point that must not only strike all hon. Members as relevant but arise from their immediate experience. For example, why has a major industry like the British Steel Corporation not had sufficient capacity to meet the upturn in demand? How often have we heard this in the post-war period? How far has the Government's initial attitude towards the Corporation in 1970 been responsible?
The world currency situation is giving rise to further instability and making even more difficult our payments deficit, which is running at a rate of £800 million.
My right hon. Friend the Member for Birmingham, Stechford (Mr. Roy Jenkins), in a striking speech, told us of the increasing stresses on the world trading system imposed by the current practice of dirtily floating rates and the increasing disinclination to hold dollars and pounds. We all know that the pound and the dollar are undervalued. But that merely serves to remind us of how little confidence there is now not merely in Washington but seemingly in London. My right hon. Friend also brought home to us that we are now beginning to experience the real costs of floating rates.
The supreme threat to the Government's economic policy and election prospects, in view of the recent Manchester by-election result and the treatment of the Minister for Trade and Consumer Affairs a fortnight ago in Birmingham, are rising prices and the containment of inflation. It is no consolation, as the right hon. Member for Orkney and Shetland reminded us, to be told that inflation is a European or, indeed, a world problem. Clearly the Government are pinning their hopes on a further phase of their counter-inflation policy, but they have not yet got that phase. I express the hope that phase 3 will provide for threshold agreements, a more humane pay code, and a tougher price code.
I should like to refer briefly to the second and third of those items. In doing so, I will cite as an illustration my local experience in Sheffield. I am not being parochial in referring to the major industrial organisation in Sheffield of Firth Brown. I shall raise a matter which may well already have affected many such organisations and which may well come within the experience of some hon. Members. The workers' representatives at Firth Brown negotiated last year a holiday entitlement with the management which was caught in the pipeline by the freeze. The management and the men were agreed that it was a no-cost settlement because the workers would have to take the extra days because the works would be shut down. In spite of that the Pay Board ruled that the extra

holiday should be offset at its full cost because of the limit of £1 plus 4 per cent.
The shop stewards have written to me to say that all their members are terribly embittered. How far does the Financial Secretary consider that the Pay Board's attitude is contributing to that atmosphere? How does he think that that atmosphere will be conducive to a basis of consent, without which he must know that phase 3 is unlikely to come about?
I am asking for a more humane pay code. Further, I want a tougher price code. Many hon. Members must be aware by now of some of the experiences of the Price Commission. It is an open secret that some of the Commission's members as well as the public are generally fed up with the price code and are convinced that it must be modified before phase 3. There is a growing feeling that a good many industrialists have been trying to exploit the code in a thoroughly anti-social way. I shall quote from an article in the Sunday Telegraph which I brought to the attention of the Prime Minister yesterday afternoon. The article, which appeared on 8th July 1973, quoted a commission member as saying about businessmen:
They were obviously determined to squeeze every last thing out of the concept of allowable costs when their profit levels were already verging on immorality.
That is believed to be the expressed view of a member of the Price Commission. Another commission member is reported in the article to have said:
In other words, some industrialists have been trying to con us and the code has been working for them.
He is referring to the industrialists. He continued
Some of us simply didn't realise how cunning and ruthless some businessmen can be.
Does the Financial Secretary believe that a tougher price code is called for if phase 3 is to be negotiated? Of course, without that negotiation the Government's economic policy is unlikely to survive.

6.14 p.m.

Mr. Christopher Tugendhat: We have ranged quite far in this debate although it is a Third Reading debate. We have


dealt with many aspects of the Government's economic policy apart from the Budget. However, it is fair to remind the House of the basis on which my right hon. Friend the Chancellor of the Exchequer based his Budget when he introduced it. He said at the time that his overwhelming objective was to go for growth. The success which he has achieved should be given the credit which is its due.
I do not begrudge hon. Members for drawing attention to the difficulties of the moment. Nor do I blame them for drawing attention to problems which did not seem to loom as large on the horizon at the time of the Budget as they do now. But it is reasonable to give the Government credit it deserves. It is right to remember that the target which my right hon. Friend announced of a 5 per cent. growth rate has been achieved.
It is all very well for hon. Members to speculate about how long the economy will be able to maintain its present rate of growth. It is all very well for them to speculate about the extent of the slowdown which may or may not occur. But if they are fair they will recognise that the achievement to date has been much greater than that which the right hon. Member for Leeds, East (Mr. Healey) suggested would be possible when he was speaking the day after the Budget debate.
We have also seen a staggering fall in the level of unemployment. That has been a desirable fall but something which we do not hear much about. In view of the attention given to the high level of unemployment last year it is only reasonable to draw attention to that success, too.
Opposition hon. Members have not been entirely fair in their references to exports. I am as aware as they are of the balance of payments problems which the country faces. However, it is a truly staggering phenomenon in British postwar history to see exports rising at twice the rate of imports in volume terms. That is an indication that the underlying performance of the economy is perhaps a great deal more impressive than the constant emphasis on the problems of inflation might lead us to suppose.
I know that there is at least one other hon. Member who wishes to speak and I do not intend to keep the House for long. Apart from the internal inhibitions on growth there are external inhibitions—namely, the balance of payments and the international currency situation.
The right hon. Member for Birmingham, Stechford (Mr. Roy Jenkins) blamed the situation entirely on floating. I listened with great interest to what he said. I find myself in agreement with much of it, but the balance of what he said was not entirely right. It is not right to put so much blame on floating. The right hon. Gentleman should have put more blame on the position of the dollar. It is a fact that the dollar is the numeraire on which our system is based. There is now a total lack of confidence in the dollar. That is the principal cause of the difficulties which we face in the international monetary sphere.
If the Government are to make an important contribution to its solution they must devote their best efforts to producing ideas and suggestions which will enable the international community to operate on the basis of a new numeraire which does not suffer from the total lack of confidence which at present afflicts the dollar.

6.17 p.m.

Mr. Tam Dalyell: I thank the hon. Member for the Cities of London and Westminster (Mr. Tugendhat) for being so generous with his time. We are told that exports are growing stronger. How does the Treasury reconcile that with the answer given to my right hon. Friend the Member for Battersea, North (Mr. Jay) on Monday that during the first five months of 1972 and 1973 the respective figures of the differential of export-import between ourselves and the EEC were 39 per cent. and 29 per cent.? I think that those figures deserve some comment.

Mr. Higgins: Will the hon. Gentleman repeat the beginning of his question?

Mr. Dalyell: I shall hand the Financial Secretary the HANSARD reference. My second point concerns VAT offices. Here we are in harmony. The offices have done a great deal to be helpful. Like many Scottish hon. Members I owe a great deal to the constant helpfulness


of Centre 1 at East Kilbride. Centre 1 and other offices have come in for a great deal of criticism, much of it ill founded, but I have found them to be helpful.
I found it strange that the right hon. Gentleman the Chief Secretary could not answer a perfectly reasonable question about the collection costs of SET and VAT. If he is to crow in his opening speech about such statistics he should have the figures readily available.
I reiterate what has been said frequently about the regional employment premium. I hope that before October the Government will take on board that in the regions, because of the expectations of investment, it is an important matter.
Finally, I shall dwell on an issue which I hoped would be raised by the right hon. Member for Orkney and Shetland (Mr. Grimond). It will be within the recollection of the Minister of State that I met him and talked in particular about oil and land speculation. Since then we know that the Shetland Bill, which was privately promoted, is likely to be turned down because of the decision of a Committee of this House. The Government themselves said that this was essential to their strategy. They said so in April and May. Now it has been overturned by changes in the Shetland County Council and perhaps by a challenged decision of this House, when two hon. Members voted for and two against and the matter was decided on the casting vote of a Conservative chairman.
In this situation, what is the Government's strategy? I did not agree but I thought that it was sensible to say, as the Government did, that each local authority must promote its own private Bill. Shetland on its own initiative did so. Now we find, to the chagrin of the Government and many of my hon. Friends, that the Shetland Bill is no longer with us. This matter is urgent and I hope that before the Summer Recess we shall be told what is the Government's strategy on land speculation in those areas contiguous to oil resources.

6.21 p.m.

Mr. Joel Barnett: I do not think that any Finance Bill debate would be quite right without my hon. Friend the Member for

West Lothian (Mr. Dalyell) having the final speech from the back benches.
I am sure that the Chancellor of the Exchequer will regret this Bill. It is irrelevant, and the Chief Secretary to the Treasury proved that by the way he spoke of it. The Chancellor will need a lot of support and he will be sorry that in a succession of Budgets he dealt so unfairly in his tax measures. I have no doubt that he will have to reverse those measures, just as the Government have reversed so many others in the last three years. I am sure that no one will dispute—the hon. Member for Cities of London and Westminster (Mr. Tugendhat) would not do so, despite his friendly remarks towards the Government—that the Chancellor is in terrible trouble economically, and it was ridiculous of the Chief Secretary to make such a complacent speech.
But perhaps at this point I may break off and offer the Chief Secretary to the Treasury our belated congratulations on his appointment to the Privy Council. I must now revert to my more usual approach to him and tell him that, with the Chancellor in terrible trouble, it was wrong and foolish of him to be so complacent in moving the Third Reading to-day.
The Chancellor wants sustained economic growth. In that we go all the way with him. But what have we got? What we have got is not sustained economic growth but a promise that it will be sustained until the beginning of 1974. It must be the Chancellor's wish, indeed, that it will subsidise as quickly as possible, because, from the way he is going at the moment, no one can imagine that he will be able to sustain growth at the present level. No one is sorrier about that than I am.
The Chief Secretary spoke about the capacity now available, although my hon. Friend the Member for Sheffield, Attercliffe (Mr. Duffy) gave rather more facts as to why such capacity may well not be available. The Chief Secretary merely said that he "believed" this and "believed" that. He gave us no facts as to why capacity would be available. Nevertheless, let us assume that it will be available.
No one doubts that we are coming up against a serious balance of payments situation, floating or no floating. One


recognises and is delighted that exports are rising very well, but it is foolish to look at one side only and ignore the fact that imports are rising rather faster. The situation must get worse, as every objective person looking at the figures must agree.
My right hon. Friend the Member for Leeds, East (Mr. Healey) referred to the figures. For example, the average prices to manufacturing industry for materials and fuel went up in the last month alone by 3 per cent., and in the last year by 27 per cent. No one will dispute that if, as we hope, the expectations of increased manufacturing investment materials are fulfilled, much of those materials will come from increased imports. In this situation no one can expect anything other than a floating downwards of the pound or, as my right hon. Friend the Member for Birmingham, Stechford (Mr. Roy Jenkins) put it so delightfully, a daintily depreciating pound.
The only way that the Chancellor can hope to avoid further depreciation of the pound is to spend some of the not-so-massive reserves of which Conservative Members have boasted so often. As my right hon. Friend rightly said, it was absurd last week, when we saw the pound floating down as much as it was, to increase the reserves instead of having what he described as a "filthy float".
My right hon. Friend made a devastating attack on the so-called merits of floating, and few hon. Members would be in favour of floating unnecessarily long, I know that my right hon. Friend is not in favour of floating any longer than is necessary. No one will argue that floatation downwards will not add to import costs and subsequently to a worsening of inflation.
When we recall how the pound depreciated in value last weekend, it is foolish to assume that the financial directors of multinational companies, who to some extent would have been responsible, were so terribly wrong. At least they were prepared to put their money where their mouths were. It may be that they were, in effect, discounting what they thought was likely to happen to the economy as it is being managed at present.
We know that the inflationary spiral must be causing the Chancellor great

concern. Despite his condemnation of food subsidies, I should not be surprised if, in the near future—as has been the case with so many other Government statements—we were to find him reversing his view and introducing some new food subsidies.
Again, few will deny that there must inevitably be very many more price increases in the pipeline. The cost of raw material and fuel for the food industry rose over 4 per cent. in June alone and by 31 per cent. in the past year. Much of that must still remain to come through to retail prices. In these circumstances, the price inflation which over the past year has been running at 9·5 per cent. will run almost certainly at over 10 per cent. in the very near future, if it is not doing so now.
There is little doubt that at the moment prices are rising faster than earnings. As my right hon. Friend the Member for Leeds, East pointed out, the first quarter of 1973 shows, at constant prices, a fall of 0·1 per cent. in earnings as against the fourth quarter of 1972. This comparison applies to average earnings and totally disregards the large numbers of workers who receive less than average earnings and who are obviously being hurt considerably more by these colossal price increases.
It must be clear that in these circumstances it is impossible to make any prices and incomes policy effective, whether that policy is voluntary or statutory. We have seen in the past how ordinary workers have reacted to prices and incomes policies. My right hon. Friend the Member for Stechford experienced this when he tried to reduce personal consumption. Ordinary workers will do their utmost to ensure that their living standards will not fall. They will use their savings and do almost anything—they will even borrow—but they will not, if they can help it, reduce their living standards. This, however, is what the Chancellor now wants, if one accepts what he has been trying to do.
In the first two years of the Government, the Chancellor was complaining that wages were rising too rapidly. Now he is boasting that personal consumption has risen so well. He knows that it has risen faster than he wanted it to rise. He must now be seeking to cut it. I should be


delighted to be told that this is not the case.
The Chancellor is in an appalling dilemma, much of it of his own making. If he wants a united country with which to fight this important battle, he has gone about the task in the strangest possible way. What is worrying to most people are prices, food prices in particular and house prices. What has this or any other Finance Bill done about these problems? Land prices have risen to astronomical heights, forcing house prices higher and higher. The Chancellor introduced a land hoarding charge in his Budget, but no one will be surprised that there has not been a squeak from land and property speculators, for the very good reason that they know it will not have the slightest effect on them. I suspect that only the Chancellor will think that this is effective. Perhaps the Chief Secretary will think so to.
We all know from constituency experience that there are longer and longer waiting lists for council houses, because people who might otherwise move from council houses to new homes of their own simply cannot afford to do so. On top of that there is the mortgage interest rate, at present at 9½ per cent. It has been kept down from 10 per cent. only by the strong-arm tactics of the Chancellor. He has provided an across-the-board subsidy of £15 million despite all he has said about across-the-board food subsidies. The Chancellor has managed to keep the mortgage interest rate at 9½ per cent. for the moment.

Mr. Arthur Lewis: Wait and see what will happen after the by-elections. The interest rate will then go up.

Mr. Barnett: I am grateful to my hon. Friend for that observation. He is absolutely right. The Chancellor managed to keep the rate at 9½ per cent. only by the use of the composite rate of tax, at present 23·5 per cent. That rate of tax means that many old-age pensioners and others who are not liable to income tax are wrongly investing with building societies, and in so doing they are enabling the societies to have a composite rate of tax of 23·5 per cent. Bearing in mind these people who are wrongly investing in building societies, I suggest that the societies' advertisements inviting deposits

should carry a warning similar to that printed on cigarette packets, stating:
This interest rate is harmful to old-age pensioners and others not liable to tax.
That is the situation, and it is against that background that we are bound to ask what are the Chancellor's policies on interest rates. Does he want interest rates to go up or down? What kind of policy does he want? We heard nothing from the Chief Secretary. Perhaps we will hear something from the Financial Secretary. The Chancellor's only contribution to prices has been to push them up, using value added tax. I do not regret anything I have said about VAT. The Chief Secretary should speak to some of the small traders who are struggling with their quarterly returns for submission to the Customs and Excise. Let him have a word with some of those people. I have met them and talked to them. If he thinks that there is no problem with VAT, he is much mistaken.
I note that the Chief Secretary did not use the argument that prices were not pushed up considerably by VAT. All that the Chancellor arranged for was that the weights and measures inspectors should keep a close eye on them. A law should be introduced to prevent the Chancellor inflicting such cruelty on a body of men whose task this should not have been.
There is no doubt that we are facing a crisis of large proportions. The Chancellor must be awaiting with dread tomorrow's trade figures, if he has not already seen them. In the light of the imports and import costs, further shocking figures must be inevitable even if, as I hope, they are rather better tomorrow. I can only imagine that they must be better tomorrow in the light of the incredible speech by the Chief Secretary. There can be no other reason.

Mr. Patrick Jenkin: In case there should be any misunderstanding, let me make it abundantly clear that I have not seen tomorrow's trade figures.

Mr. Barnett: I am obliged for that information. I am sure that that will be helpful to the economy.
No one will be surprised that in this context the Chancellor must regret the background to this debate, namely, this Bill and its predecessors. He must know


that he has forfeited the right to the cooperation of the TUC and that without that co-operation any agreement will be virtually impossible. Such an agreement would be difficult to achieve even with the co-operation of the TUC.
What contribution does the right hon. Gentleman consider that this Finance Bill or its predecessors have made to obtaining any kind of success in the battle against inflation? What happened to the surtax payers who were to achieve miracles once taxes were reduced? How can the Chancellor justify the increases in real income he gave them if they have not, as indeed they have not, produced the goods? He should feel bitter about the fact that he did not get the miracles we and, presumably, he thought he would get. He did not get these despite the fact that he has given those people enormous tax-free bonanzas and every opportunity to reduce their tax levels.
We have had all that from this Finance Bill and its predecessors—loan interest allowable for tax disaggregation, share options, and more and more given to the people who were supposed to be delivering the goods. That has not been the result. For these reasons among all the others—because of the state which he has produced in our economy—we condemn the Chancellor and his succession of Finance Bills. I advise my right hon. and hon. Friends to vote against the Bill tonight.

6.39 p.m.

The Financial Secretary to the Treasury (Mr. Terence Higgins): It would be appropriate to take up the argument at the point at which the hon. Member for Heywood and Royton (Mr. Joel Barnett) left it. He referred to a succession of Finance Bills. It is right that we should consider not only this one but its two Conservative predecessors also. The debate we have had on this occasion has gone even wider than on former occasions, and this may well reflect the fact that we have had three Finance Bills which have implemented the promises we made in our election manifesto and which have transformed personal direct taxation, corporation tax and, with the abolition of SET and purchase tax and the introduction of VAT, our indirect tax system as well. This Bill completes a reforming

programme of vast magnitude. As a result we have a far better fiscal basis for the economic life of the country than we had when we came into office.
I should like to comment on some of the fiscal changes we have made and place them in the proper economic context against the background of the past three years. To deal first with corporation tax, we now have a system more neutral in effect which is designed to result in a better allocation of the nation's resources. The unification of income tax and surtax has simplified personal direct taxation and made it easier to understand. The relief given to the first £2,000 tranche of investment income—what Labour Members still refer to as unearned income—will encourage savings and be of help, particularly to those retired on small fixed incomes.
As regards indirect taxation, we have abolished SET with its absurd distinction between manufacturing and service industries. We have, further, abolished purchase tax with its multiple rates and detailed discriminatory provisions. In their place and as part of the Finance Bill, because it completes the process, we have a value added tax at a single positive rate of 10 per cent., the lowest in Europe. This changeover has broadened the base of our indirect taxation.
At the same time we have designed the system in such a way that the main items of importance in the budgets of pensioners and others on low incomes and those with large families attract relief. Relief is given to food in the shops, fuel, housing, bus and train fares and children's clothing and footwear. The items included in this list account for about two-thirds of the expenditure of pensioners.
It is important to note that, following our reform of indirect taxation, the burden of taxation upon food has been reduced by about £225 million. That is less than it was under the old system. I mention this because there is still some misunderstanding in the shops. People believe that VAT has caused food prices to rise. That is not true because food has been zero rated. Despite what the right hon. Member for Leeds, East (Mr. Healey) says about the "lollipop Budget", the items which we relieved


are important in the budgets of low-income families. We have also helped by abolishing SET which entered into the price of food.
If we take the overall picture and include also the question of wrapping—because some uninformed commentators have thought that this would affect food prices, overlooking the fact that the input tax of VAT is deductible for packaging—it is work emphasising that VAT is not imposed upon food whereas the previous Labour Government imposed indirect taxation upon food.
My next point is one raised by the hon. Member for Heywood and Royton about the impact on prices arising from the introduction of VAT and the abolition of SET and purchase tax. The point which is worth repeating is that VAT will be collecting, with the car tax, roughly the same revenue as would have been collected through purchase tax and SET, if they had remained at the rates current during the last financial year. Of course there were bound to be some changes in prices as a result of the changeover. Some went up, some went down and some remained the same.

Mr. Arthur Lewis: How many remained the same?

Mr. Higgins: A large number. If the hon. Member does not believe it, I would refer him to something that I think he would not regard as being in any way partisan, namely Which? Looking at the overall situation, I do not believe that the tax has had a significant impact on prices. I believe that the advertising campaign which we engaged in and the measures taken by the weights and measures inspectors were effective. The inspectors dealt with about 40,000 complaints and found that in the overwhelming majority of cases where there had been a mistake there was a voluntary reduction. In other cases they examined whether the change was justified. That has been effective. It is wrong of the hon. Member for Heywood and Royton to suggest that that has not been the case. Impartial observers realise that that is the situation.
I wish to say a few words on the question of the technical side of the changeover. My hon. Friend the Member for South Angus (Mr. Bruce-Gardyne) congratulated those responsible for the

smoothness of the changeover from SET and purchase tax to VAT. He also paid tribute to the way in which the distributive trade had carried out the changeover. I endorse what he said. Customs and Excise has greatly benefited, as I think everyone has, from the use of the Green Paper approach to VAT and, as a result of the discussions which took place, the changeover has been much smoother than it would otherwise have been. Customs and Excise has done a magnificent job.
It is also worth saying, in contrast to the constant scaremongering of the hon. Member for Heywood and Royton, that the administrative burden will be nowhere near as great as he has said it will be. As a result of new Clause 39, to which we agreed yesterday, the use of VAT data for statistical purposes will mean that the burden of form-filling on small traders will be significantly reduced. That is not an unimportant factor.
I turn to consider some of the more remarkable speeches which have been made in this debate. I said in my opening remarks that the debate had been wide ranging. In contrast with the Third Reading stage on any former Finance Bill, the international monetary situation has figured rather prominently in our discussions.
The interesting feature of the speeches made from the Opposition benches was the contrast between the speech of the right hon. Member for Leeds, East and that of the right hon. Member for Birmingham, Stechford (Mr. Roy Jenkins). One of the dangers of the right hon. Member for Leeds, East making the same speech several times is that the figures he uses get out of date. He referred to the position of sterling at the end of last week, whereas the right hon. Member for Stechford was more up to date and referred to the position of sterling, which has improved, this week.

Mr. Healey: If the hon. Member looks at HANSARD tomorrow, he will find that I referred to the improvement which had taken place in sterling since last Monday. I said that one could not be sure that it was not due to intervention by the central banks following the decision of the bank of International Settlements meeting. The hon. Gentleman must have been asleep at that time. He has made a distinction without a difference.

Mr. Higgins: Despite the temptation, I was not asleep during the right hon. Gentleman's speech.
I should like to take up a more technical point which the right hon. Member for Leeds, East raised. It shows just how out of date he is. He was still referring to the question of the J curve. The matter was explained concisely by the right hon. Member for Stechford, who said that, if the exchange rate of a currency depreciates, things get worse before they get better. The right hon. Member for Leeds, East was still talking about the J curves and said they were perhaps U curves or L curves. This is a question of looking at a moment of time with a single step change. That is not what has been happening with floating.
The right hon. Member for Stechford rightly argued that that was not the situation but that what one had was a whole family of J curves.

Mr. Healey: I said that.

Mr. Higgins: The right hon. Gentleman did not say that. He adopted a very out-of-date and simplistic view.

Mr. Healey: The hon. Gentleman must not misrepresent me. Again, if he reads HANSARD, he will see that I referred to the fact that we do not have a J curve; we have a U curve, and probably a succession of U curves. During the debate in January I said that we were all suffering from a double U curve for that reason. I made exactly the same point as my right hon. Friend the Member for Birmingham, Stechford (Mr. Roy Jenkins).

Mr. Higgins: The right hon. Gentleman frequently debates on the basis of making outrageous statements and then withdrawing them when challenged. If someone challenges his statements, he says that he is being misrepresented.
I wish to take up the technical point referred to by the right hon. Member for Stechford. He adduced the interesting argument that this succession of J curves created an unstable equilibrium. He said that it must always go down. If he looks at the figures for the increase in the volume of exports, he will see that that would not seem to be so. I do not believe

it to be so. It is probably true, however, that we shall, as a result of this, so to speak, family effect, get a series of very erratic figures which may not fully reflect the underlying trend.
The right hon. Member for Stechford was right when he said that it is very important that we should press ahead urgently with the reform of the international monetary system. The Government, and particularly the Chancellor of the Exchequer, may reasonably claim that they have played a major role in seeking to further that aim. In the present circumstances the matter is even more urgent than it was before. However, this is entirely common ground between both sides of the House and I hope that, on the basis which my right hon. Friend put forward at the International Monetary Fund meeting some time ago, and the work done subsequently, we shall be able to achieve a reasonable reform.
The great danger clearly is cost inflation. Our counter-inflationary policy is designed, in marked contrast with the previous Government's legislation, to protect growth and not to reinforce deflation and stagnation. That is a very important difference. The standstill and phase 2 have enabled us, in the face of rising world prices, which are increasing faster than at any time since the Korean boom in 1950, to do better than our competitors in combating inflation.
It is worth drawing the attention of the House and of those interested in the relative position of sterling to the OECD figures which show how the United Kingdom compares with other advanced countries in respect of the annual percentage rise in wholesale and consumer prices between, say, October 1972 and March 1973. The current issue of the Economic Progress Report shows that the United Kingdom is less than half way up the consumer price list and almost lowest on the wholesale price list. That is an important factor to be taken into account in relation to our international competitive position.
The relationship between costs and prices and the exchange rate is important. There is evidence that, over the past three years or so, there has been a fundamental change in the British economy. [HON. MEMBERS: "Hear, hear."] It has been a change for the


better in many ways, as I shall seek to demonstrate. When we came to office in 1970 there was a faster rise in unemployment than would have been expected by past relationships in regard to the level of output. At that time the rapid rise in unemployment complicated the difficulties of demand management. We witnessed an unprecedented shake out of labour, reflecting perhaps a changing attitude by employers to maintaining their work forces largely intact in a period of slow growth. [HON. MEMBERS: "Who caused it?"] Hon. Members opposite.
That reflected the poor financial position which was caused by the rapid rise in wages immediately before the 1970 election. It was far from clear when we came to office that the right course was immediately to take reflationary measures. However, contrary to what might previously have been thought, we decided in July 1971 that it would be right to act to increase the level of demand, which would have a favourable effect on unemployment, and the increase in output would have a favourable effect on the question of costs. No one today would deny, I think, that that was the right thing to do. [Interruption.] It is historical, but there is an important point to be made and I want to make it.
One of the aims of our policy was to increase the growth of output, and manufacturing production has been rising strongly for about 18 months. Unlike the situation in the previous period of economic growth, the outlook ahead for manufacturing industry is that it will continue to rise at a very fast rate. The latest figure shows that the output per head in manufacturing is 14 per cent. higher than it was a year ago. This is an important point to be considered. With the faster growth of demand and activity there was a danger of strains emerging in 1974, and the danger of overheating is recognised We do not want to go from demand inflation to cost-pull inflation.
It was for that reason, and to avoid taking crisis measures, that my right hon. Friend the Chancellor introduced the expenditure cuts announced in May. Unlike what happened when the right hon. Member for Cardiff, South-East (Mr. Callaghan) was Chancellor of the Exchequer and seemed to think that public expenditure could be reined back, we

took the view that we must make a long-term appraisal of the situation. We felt that it was right to act in time to ensure that the rapid rate of economic growth could be sustained.
This is the whole purpose of the Government's policy to ensure a rapid sustainable rate of economic growth, and I believe that the measures taken by my right hon. Friend in May are designed to that end and that they will be succesful. This is the point I wish to make in reply to the points made by the hon. Member for Sheffield, Attercliffe (Mr. Duffy) about overheating of the economy.
The important feature to be considered is that of real disposable income. It is true that such income shows considerable quarterly variation, but we need to take a longer-term comparison. On this basis real disposable income in the first quarter of the year was 7½ per cent. higher than it was a year ago. That again is a very important consideration in appraising the Government's management of the economy and in judging the relevance of this Finance Bill.
My right hon. Friend said in his Budget speech that this Finance Bill would complete the three major areas of tax reform. Indeed, the function of this Finance Bill is to put the finishing touches to those reforms. These reforms are now complete in that respect and our fiscal system is the better for it.
We have said that we would not only reform the tax system but would reduce taxation. Reductions have been made in direct taxation, notably in income tax and corporation tax, and in indirect taxation where VAT at the single positive rate of 10 per cent. has replaced both SET and the full rate of purchase tax. Between 1969–70 and 1972–73 indirect taxes have been reduced as a proportion of gross national product from 19·9 per cent. to 17·2 per cent. I repeat, from 19·9 per cent to 17·2 per cent. Taxes on personal income, as a percentage of total wages and salaries, have fallen from 22 per cent. in 1969–70 to 20·9 per cent. in 1972–73. [Interruption.] Labour Members cannot take it. Overall, as my right hon. Friend the Chief Secretary said, the British people this year will pay well over £4.000 million less tax than if the rates of tax in force at the date of the last General Election were still operative today.
Other indicators confirm, if confirmation is needed, that this reduction in taxation has been a real reduction. For example, taxation as a percentage of gross national product has fallen from 38·3 per cent. since 1969–70 to 33·5 per cent. last year—that is to say, in 1972–73.

Mr. Brian Walden: Bogus.

Mr. Higgins: There is nothing bogus about the figures. The fact is that these have been substantial reductions.
The Finance Bill to which we are now asking the House to give a Third Read-

ing completes the reform in the structure of taxation and also reflects our policy of reducing taxation. If we take the three Finance Bills together, I believe that the Government are right to say that they have made a major improvement in the system and that the total burden of taxation has changed in such a way that we can reasonably feel that the pledges we made in our manifesto have been implemented. On that basis, I ask the House to give the Bill a Third Reading.

Question put, That the Bill be now read the Third time:—

The House divided: Ayes 245, Noes 230.

Division No. 196.]
AYES
[7.0 p.m.


Adley, Robert
Edwards, Nicholas (Pembroke)
Kershaw, Anthony


Allason, James (Hemel Hempstead)
Elliot, Capt. Walter (Carshalton)
Kimball, Marcus


Archer, Jeffrey (Louth)
Elliott, R. W. (N'c'tle-upon-Tyne, N.)
King, Evelyn (Dorset, S.)


Astor, John
Emery, Peter
King, Tom (Bridgwater)


Atkins, Humphrey
Eyre, Reginald
Kinsey, J. R.


Awdry, Daniel
Fenner, Mrs. Peggy
Kirk, Peter


Baker, Kenneth (St. Marylebone)
Finsberg, Geoffrey (Hampstead)
Kitson, Timothy


Baker, W. H. K. (Banff)
Fisher, Nigel (Surbiton)
Knight, Mrs. Jill


Bell, Ronald
Fookes, Miss Janet
Knox, David


Bennett, Sir Frederic (Torquay)
Fortescue, Tim
Lamont, Norman


Bennett, Dr. Reginald (Gosport)
Foster, Sir John
Lane, David


Benyon, W.
Fowler, Norman
Langford-Holt, Sir John


Berry, Hn. Anthony
Fox, Marcus
Le Merchant, Spencer


Bitten, John
Fraser, Rt. Hn. Hugh (St'fford & Stone)
Lewis, Kenneth (Rutland)


Biggs-Davison, John
Galbraith, Hn. T. G. D.
Lloyd, Ian (P'tsm'th, Langstone)


Blaker, Peter
Gibson-Watt, David
Longden, Sir Gilbert


Boscawen, Hn. Robert
Gilmour, Sir John (Fife, E.)
Luce, R. N.


Bossom, Sir Clive
Glyn, Dr. Alan
McAdden, Sir Stephen


Bowden, Andrew
Godber, Rt. Hn. J. B.
MacArthur, Ian


Braine, Sir Bernard
Goodhart, Philip
McLaren, Martin


Bray, Ronald
Gorst, John
McMaster, Stanley


Brinton, Sir Tatton
Gower, Raymond
McNair-Wilson, Michael


Brocklebank-Fowler, Christopher
Grant, Anthony (Harrow, C.)
McNair-Wilson, Patrick (New Forest)


Brown, Sir Edward (Bath)
Green, Alan
Maddan, Martin


Bruce-Gardyne, J.
Grieve, Percy
Madel, David


Bryan, Sir Paul
Grylls, Michael
Marten, Neil


Buchanan-Smith, Alick (Angus, N & M)
Gummer, J. Selwyn
Mather, Carol


Buck, Antony
Gurden, Harold
Maudling, Rt. Hn. Reginald


Burden, F. A.
Hall, Sir John (Wycombe)
Mawby, Ray


Butler, Adam (Bosworth)
Hall-Davis, A. G. F.
Maxwell-Hyslop, R. J.


Carlisle, Mark
Hamilton, Michael (Salisbury)
Meyer, Sir Anthony


Carr, Rt. Hn. Robert
Hannam, John (Exeter)
Miscampbell, Norman


Channon, Paul
Harrison, Brian (Maldon)
Mitchell, Lt.-Col. C.(Aberdeenshire, W)


Chapman, Sydney
Harrison, Col. Sir Harwood (Eye)
Mitchell, David (Basingstoke)


Churchill, W. S.
Haselhurst, Alan
Moate, Roger


Clark, William (Surrey, E.)
Hastings, Stephen
Money, Ernie


Clarke, Kenneth (Rushcliffe)
Havers, Sir Michael
Monks, Mrs. Connie


Clegg, Walter
Hawkins, Paul
Monro, Hector


Cockeram, Eric
Hicks, Robert
Montgomery, Fergus


Cooke, Robert
Higgins, Terence L.
More, Jasper


Coombs, Derek
Hiley, Joseph
Morgan, Geraint (Denbigh)


Cooper, A. E.
Hill, S. James A.(Southampton, Test)
Mudd, David


Cordle, John
Holt, Miss Mary
Nabarro, Sir Gerald


Corfield, Rt. Hn. Sir Frederick
Hornby, Richard
Neave, Airey


Cormack, Patrick
Hornsby-Smith, Rt. Hn. Dame Patricia
Nicholls, Sir Harmar


Critchley, Julian
Howe, Rt. Hn. Sir Geoffrey
Noble, Rt. Hn. Michael


Crouch, David
Howell, David (Guildford)
Normanton, Tom


Crowder, F. P.
Howell, Ralph (Norfolk, N.)
Nott, John


Davies, Rt. Hn. John (Knutstord)
Hunt, John
Onslow, Cranley


d'Avigdor-Goldsmid, Maj.-Gen. Jack
Hutchison, Michael Clark
Osborn, John


Dean, Paul
Iremonger, T. L.
Owen, Idris (Stockport, N.)


Deedes, Rt. Hn. W. F.
James, David
Page, Rt. Hn. Graham (Crosby)


Digby, Simon Wingfield
Jenkin, Patrick (Woodford)
Page, John (Harrow, W.)


Dixon, Piers
Jessel, Toby
Parkinson, Cecil


Dodds-Parker, Sir Douglas
Johnson Smith, G. (E. Grinstead)
Percival, Ian


Dykes, Hugh
Jones, Arthur (Northants, S.)
Pike, Miss Mervyn


Eden, Rt. Hn. Sir John
Jopling, Michael
Pink, R. Bonner



Kellett-Bowman, Mrs. Elaine
Pounder, Rafton




Powell, Rt. Hn. J. Enoch




Price, David (Eastlelgh)
Shelton, William (Clapham)
Tugendhat, Christopher


Proudfoot, Wilfred
Shersby, Michael
Turton, Rt. Hn. Sir Robin


Pym, Rt. Hn. Francis
Skeet, T. H. H.
Vaughan, Dr. Gerard


Quennell, Miss J. M.
Smith, Dudley (W'wick & L'mington)
Vickers, Dame Joan


Raison, Timothy
Soref, Harold
Waddington, David


Ramsden, Rt. Hn. James
Speed, Keith
Welder, David (Clitheroe)


Rawlinson, Rt. Hn. Sir Peter
Spence, John
Walker, Rt. Hn. Peter (Worcester)


Redmond, Robert
Sproat, Iain
Wall, Patrick


Reed, Laurance (Bolton, E.)
Stainton, Keith
Walters, Dennis


Rees, Peter (Dover)
Stanbrook, Ivor
Ward, Dame Irene


Rees-Davies, W. R.
Stewart-Smith, Geoffrey (Belper)
Warren, Kenneth


Renton, Rt. Hn. Sir David
Stodart, Anthony (Edinburgh, W.)
Weatherill, Bernard


Rhys Williams, Sir Brandon
Stokes, John
White, Roger (Gravesend)


Ridley, Hn. Nicholas
Stuttaford, Dr. Tom
Whitelaw, Rt. Hn. William


Ridsdale, Julian
Sutcliffe, John
Wilkinson, John


Roberts Wyn (Conway)
Tapsell, Peter
Winterton, Nicholas


Rodgers, Sir John (Sevenoaks)
Taylor, Frank (Moss Side)
Wolrige-Gordon, Patrick


Rossi, Hugh (Hornsey)
Tebbit, Norman
Wood, Rt. Hn. Richard


Rost, Peter
Temple, John M.
Woodnutt, Mark


Royle, Anthony
Thatcher, Rt. Hn. Mrs. Margaret
Worsley, Marcus


St. John-Stevas, Norman
Thomas, John Stradling (Monmouth)
Younger, Hn. George


Sandys, Rt. Hn. D.
Thompson, Sir Richard (Croydon, S.)



Scott, Nicholas
Tilney, Sir John
TELLERS FOR THE AYES:


Scott-Hopkins, James
Trafford, Dr. Anthony
Mr. Oscar Murton and


Shaw, Michael (Sc'b'gh & Whitby)
Trew, Peter
Mr. Hamish Gray.




NOES


Allaun, Frank (Salford, E.)
Duffy, A. E. P.
Kelley, Richard


Allen, Scholefield
Dunn, James A.
Kerr, Russell


Archer, Peter (Rowley Regis)
Dunnett, Jack
Kinnock, Neil


Armstrong, Ernest
Eadie, Alex
Lambie, David


Ashton, Joe
Edelman, Maurice
Lamborn, Harry


Atkinson, Norman
English, Michael
Lamond, James


Bagier, Gordon A. T.
Evans, Fred
Lawson, George


Barnett, Guy (Greenwich)
Ewing, Harry
Leadbitter, Ted


Barnett, Joel (Heywood and Royton)
Faulds, Andrew
Leonard, Dick


Baxter, William
Fernyhough, Rt. Hn. E.
Lestor, Miss Joan


Benn, Rt. Hn. Anthony Wedgwood
Fisher, Mrs. Doris (B'ham, Ladywood)
Lewis, Arthur (W. Ham, N.)


Bennett, James (Glasgow, Bridgeton)
Fitch, Alan (Wigan)
Lewis, Ron (Carlisle)


Bidwell, Sydney
Fletcher, Raymond (Ilkeston)
Lipton, Marcus


Bishop, E. S.
Fletcher, Ted (Darlington)
Lomas, Kenneth


Blenkinsop, Arthur
Foot, Michael
Loughlin, Charles


Booth, Albert
Forrester, John
Lyon, Alexander W. (York)


Bottomley, Rt. Hn. Arthur
Fraser, John (Norwood)
Lyons, Edward (Bradford, E.)


Bradley, Tom
Galpern, Sir Myer
Mabon, Dr. J. Dickson


Broughton, Sir Alfred
Gilbert, Dr. John
McBride, Neil


Brown, Robert C. (N'c'lle-u-Tyne, W.)
Ginsburg, David (Dewsbury)
McElhorne, Frank


Brown, Hugh D. (G'gow, Provan)
Gourlay, Harry
McGuire, Michael


Brown, Ronald (Shoreditch & F'bury)
Grant, George (Morpeth)
Machin, George


Buchan, Norman
Grant, John D. (Islington, E.)
Mackenzie, Gregor


Buchanan, Richard (G'gow, Sp'burn)
Grimond, Rt. Hn. J.
Mackie, John


Butler, Mrs. Joyce (Wood Green)
Hamilton, James (Bothwell)
Maclennan, Robert


Callaghan, Rt. Hn. James
Hamilton, William (Fife, W.)
McMillan, Tom (Glasgow, C.)


Campbell, I. (Dunbartonshire, W.)
Hamling, William
McNamara, J. Kevin


Carmichael, Neil
Hannan, William (G'gow, Maryhill)
Mallalieu, J. P. W. (Huddersfield, E.)


Carter, Ray (Birmingh'm, Northfield)
Harrison, Walter (Wakefield)
Marks, Kenneth


Carter-Jones, Lewis (Eccles)
Hart, Rt. Hn. Judith
Marquand, David


Castle, Rt. Hn. Barbara
Hatton, F.
Marsden, F.


Clark, David (Coine Valley)
Healey, Rt. Hn. Denis
Marshall, Dr. Edmund


Cohen, Stanley
Heffer, Eric S.
Mason, Rt. Hn. Roy


Concannon, J. D.
Hooson, Emlyn
Meacher, Michael


Conlan, Bernard
Horam, John
Mellish, Rt. Hn. Robert


Corbet, Mrs. Freda
Howell, Denis (Small Heath)
Mendelson, John


Cox, Thomas (Wandsworth, C.)
Hughes, Rt. Hn. Cledwyn (Anglesey)
Millan, Bruce


Cronin, John
Hughes, Mark (Durham)
Miller, Dr. M. S.


Crossman, Rt. Hn. Richard
Hughes, Robert (Aberdeen, N.)
Milne, Edward


Cunningham, G. (Islington, S.W.)
Hughes, Roy (Newport)
Mitchell, R. C. (S'hampton, Itchen)


Cunningham, Dr. J. A. (Whitehaven)
Hunter, Adam
Morgan, Elystan (Cardiganshire)


Dalyell, Tam
Irvine, Rt. Hn. Sir Arthur (Edge Hill)
Morris, Charles R. (Openshaw)


Darling, Rt. Hn. George
Jay, Rt. Hn. Douglas
Mulley, Rt. Hn. Frederick


Davidson, Arthur
Jeger, Mrs. Lena
Murray, Ronald King


Davies, Denzil (Llanelly)
Jenkins, Hugh (Putney)
Oakes, Gordon


Davies, G. Elfed (Rhondda, E.)
Jenkins, Rt. Hn. Roy (Stechford)
Ogden, Eric


Davis, Clinton (Hackney, C.)
John, Brynmor
O'Malley, Brian


Davis, Terry (Bromsgrove)
Johnson, James (K'ston-on-Hull, W.)
Oram, Bert


Deakins, Eric
Johnson, Walter (Derby, S.)
Orbach, Maurice


Delargy, Hugh
Johnston, Russell (Inverness)
Oswald, Thomas


Dell, Rt. Hn. Edmund
Jones, Barry (Flint, E.)
Owen, Dr. David (Plymouth, Sutton)


Dempsey, James
Jones, Dan (Burnley)
Padley, Walter


Dormand, J. D.
Jones, T. Alec (Rhondda, W.)
Paget, R. T.


Douglas, Dick (Stirlingshire, E.)
Judd, Frank
Palmer, Arthur


Douglas-Mann, Bruce
Kaufman, Gerald
Pannell, Rt. Hn. Charles




Pardoe, John







Parry, Robert (Liverpool, Exchange)
Short, Mrs. Renée (W'hampton, N.E.)
Tope, Graham


Peart, Rt. Hn. Fred
Silkin, Rt. He. John (Deplford)
Tuck, Raphael


Pendry, Tom
Silkin, Hn. S.C. (Dulwich)
Urwin, T. W.


Perry, Ernest G.
Sillars, James
Varley, Eric G.


Prentice, Rt. Hn. Reg
Silverman, Julius
Wainwright, Edwin


Prescott, John
Skinner, Dennis
Walden, Brian (B'm'ham, All Saints)


Frobert, Arthur
Small, William
Walker, Harold (Doncaster)


Radice, Giles
Smith, Cyril (Rochdale)
Wallace, George


Reed, D. (Sedgefield)
Spearing, Nigel
Weitzman, David


Rees, Merlyn (Leeds, S.)
Spriggs, Leslie
Wellbeloved, James


Rhodes, Geoffrey
Stallard, A. W
Wells, William (Walsall, N.)


Richard, Ivor
Steel, David
While, James (Glasgow, Pollok)


Roberts, Albert (Normanton)
Stewart, Donald (Western Isles)
Whitehead, Phillip


Roberts, Rt. Hn. Goronwy (Caernarvon)
Stoddart, David (Swindon)
Williams, Alan (Swansea, W.)


Robertson, John (Paisley)
Stonehouse, Rt. Hn. John
Wilson, Alexander (Hamilton)


Rodgers, William (Stockton-on-Tees)
Stott, Roger (Westhoughton)
Wilson, Rt. Hn. Harold (Huyton)


Roper, John
Strang, Gavin
Wilson, William (Coventry, S.)


Rose, Paul B.
Summerskill, Hn. Dr. Shirley
Woof, Robert


Rowlands, Ted
Swain, Thomas



Sandelson, Neville
Taverne, Dick
TELLERS FOR THE NOES:


Sheldon, Robert (Ashton-under-Lyne)
Thorpe, Rt. He. Jeremy
Mr. Donald Coleman and


Shore, Rt. Hn. Peter (Stepney)
Tins, James
Mr. John Golding.


Short, Rt. Hn. Edward (N'c'tle-u-Tyne)
Tomney, Frank



Bill read the Third time and passed.

Question accordingly agreed to.

PROTECTION OF AIRCRAFT BILL [Lords]

As amended (in the Standing Committee), considered.

New Clause 1

ANNUAL REPORT BY SECRETARY OF STATE AS TO NOTICES AND DIRECTIONS UNDER PART II

(1) The Secretary of State shall, on or before 31st January in each year, lay before each House of Parliament a report stating the number of notices served by him under section 8 and the number of directions given by him under sections 9, 10 and 11 of this Act during the period of twelve months which expired with the preceding December.

5 (2) Each such report shall deal separately with notices served under section 8, directions given under section 9, directions given under section 10 and directions given under section 11 of this Act, and, in relation to each of those matters, shall show separately—

10 (a) the number of notices or directions which, during the period to which the report relates, were served on or given to persons as being, or as appearing to the Secretary of State to be about to become, operators of aircraft;

(b) the number of notices or directions which during that period were served on or given to persons as being, or as appearing to the Secretary of State to be about to become, managers of aerodromes; and

15 (c) the number of notices or directions which during that period were served on or given to persons as being, or as appearing to the Secretary of State to be about to become, authorities responsible for air navigation installations.

(3) In this section any reference to section 8, section 10 or section 11 of this Act shall be construed as including a reference to that section as applied or modified by section 18 20 of this Act—[Mr. Onslow.]

Brought up, and read the First time.

7.11 p.m.

The Under-Secretary of State for Trade and Industry (Mr. Cranley Onslow): I beg to move, That the clause be read a Second time.

Mr. Deputy Speaker (Mr. E. L. Mallalieu): With new Clause 1, I understand that it will be convenient to discuss the following:

Amendment (a), in line 2, after 'report', insert 'in a statutory instrument'.

Amendment (b), in line 2, after 'stating', insert '(a)'.

Amendment (c), in line 4, at end insert:

'(b) the effect of each such notice or direction;

(c) the person upon whom each such notice or direction has been served; and

(d) the duration of each such notice or direction'.

Amendment (d) in line 17, at end insert:

(d) in respect of each notice or direction to which reference is made in this subsection, the effect of such notice or direction, the person upon whom the notice or direction has been served and the duration of each such notice or direction.'.

New Clause 2—Notice and directions to be confirmed by Statutory Instrument.

New Clause 3—Annual report on notices and directions.

Mr. Onslow: I am sure that that selection will meet with the convenience of the House.
In Committee, the Government undertook to consider the possibility of making an annual report to Parliament indicating the extent to which notices and directions had been given under these provisions. I am pleased now to be able to move this clause to fulfil that undertaking. Its terms are self-explanatory. and I need not reiterate them.
I recognise that the clause does not go quite as far as some hon. Members might wish. But it is our view that to go further and specifically to disclose details of the notices and directions, even though in some cases it might be 12 months after they had been served, would be to make available information about our security effort which I believe it would be totally wrong to make public.
I appreciate that the Opposition have sought to meet this point by proposing that the annual report of the Secretary of State should omit information affecting national security. I have to say that I do not think that that would help. An aircraft hijacking or sabotage would not necessarily threaten the State or its security. But I believe that none of us would wish to disclose information which would assist hijackers and saboteurs, whether or not it placed national security at risk. Bearing in mind the purposes of Part II, to which notices and directions must be related, any notice and direction must involve security considerations. In practice, I do not think that it would he possible to give details of notices and directions without disclosing information of potential value to terrorists and criminals.
I feel, therefore, that the clause goes as far as it is possible to go within the limits by which we are bound.

Mr. Roy Mason: I rise to move the Opposition amendments and particularly new Clauses Nos. 2 and 3.

Mr. Deputy-Speaker (Mr. E. L. Mallalieu): Order. The right hon. Member cannot move them until we reach them.

7.15 p.m.

Mr. Mason: I rise to speak particularly to new Clause 2.
I think that the House welcomes the Bill back on Report. As the Minister no doubt remembers, when the Bill was in Committee the Government gave the impression, especially from what was said by the Minister for Aerospace and Shipping, that the Bill was wanted in a hurry. The Government wanted to get it through almost without considering any amendments. But despite their haste and their efforts to pressurise some of my hon. Friends to get the Bill through as quickly as possible, on two occasions the Opposition saved the Bill because we kept the Committee in being by providing a quorum.
The Bill has changed considerably since its inception. When it was introduced in another place it was a small Bill. The Minister in charge of it was so pressured by the authority and expertise of the Members in the other place that he had to take it back. It was redrafted and returned to the other place and again amended, and we now have the Bill before us after it has been still further amended.
I am pleased that the Minister has acceded to the minimum of our requests for parliamentary accountability. The clause goes some way towards recognising our case, but all that it suggests is that the Government are prepared to report annually to the House, first, giving the number of directives and notices to all the persons concerned with aircraft and airport security, and, secondly, that it shall be a calendar year of directives to be revealed within a month of the year ending.
All that we are to get is information about the numbers of directives and the persons involved. It is to be a statistical report and not a Statutory Instrument, and consequently there will be no debate


upon it. In other words, there will be 12 months of secret issues of directives and notices, but there will be no information to Parliament and no parliamentary or public accountability. There will not even be a debate after one year's use of the Minister's powers to issue directives.
The powers to issue directives are extraordinary. By means of a directive the Minister can ground all aircraft, detain all passengers, search everyone at the airport, establish guards at every aircraft door, direct persons employed for specific duties—constables or security guards—to carry out searches and other measures, and authorise the carrying of firearms. The Minister can also issue directives to all aircraft operators and airport managers.
We recognise the need for these powers to enable the Minister to act effectively and swiftly against hijacking and aerial sabotage, but we must be satisfied that there will be some form of parliamentary control over the possible use of these massive powers. A ministerial directive is a strong reserve power. It should be a rarely used weapon. and the public and Parliament are usually informed when it is used.
The Minister's intention is to issue secret directives without Parliament's being informed. Who can challenge their fairness? Who can determine the extent to which this directive power is possibly being abused? Where lies the dividing line, and who will be able to judge, between a ministerial directive issued for passenger safety and a dictatorial act forcing airline operatives or airport managers to act against a previously democratically agreed airline and airports policy?
Is not the Minister sensitive about the extent to which he is taking upon himself such sweeping dictatorial powers which he can use secretly and leave Parliament in ignorance of his acts or deeds? Who is to determine what is reasonable or unreasonable pressure via a notice or directive upon an airport manager, upon all British Airport Authority airports and upon local authority airports? If an airport manager disagrees and consults a lawyer, and consequently there are leaks to the Press or Private Notice Questions, that will shatter most of what the Minister wants to achieve.
We believe that parliamentary knowledge shortly after a directive has been given may well serve the Minister's intent to forestall a hijacking scheme or to tighten security at airports and avoid charges of dictatorship and the maltreatment of persons. In most cases the act by directive will have served its purpose, and knowledge of it seven days later, as the new clause suggests, will not matter.
We have always recognised that it might be necessary to act urgently, and a directive gives the Minister the necessary speed and authority. Also, the dangers inherent in hijacking, aerial sabotage and damage to navigation aids endangering passengers and aircraft require a swift authoritative reaction. We have recognised all that, and Parliament is likely to grant the Minister the authority to act, but Parliament will want to know what has been done and we must, therefore, press for regular reports.
The Minister's annual digest of statistics, with no other information, is not satisfactory. First, I do not think that the Minister for Aerospace and Shipping intends to be either satisfactory or helpful. When we were discussing this matter in Committee I said to the hon. Gentleman:
He"—
that is the Minister—
said that if a notice or directive were revealed it would suggest to the enemy, the hijacker or the saboteur, the areas of concern and he could not see that it would serve hon. Members.
The Minister replied:
I said that there was a balance. Any extra information is of value to Members of Parliament and that would be a bonus from the amendment, but I also said that there would be an added danger to the constituents of hon. Members in giving information that is the balance.
I retorted:
There is no balance. It is all one way, completely so, dictatorially so",
to which the Minister said:
Yes",
following which I said:
That is what is causing concern to my hon. Friends.
Later, when we pressed the Minister about the annual report, he said:
I can see no objection at present in principle to issuing an annual statement on the number of occasions upon which directives have been given. Frankly, I do not think it adds up to any real parliamentary scrutiny.


That reveals, first, a dictatorial attitude, and, secondly, that the Minister does not intend any real parliamentary scrutiny. The hon. Gentleman's utterances have revealed the mind of the man. He is either politically naive—which I begin to doubt—or, more likely, there is a dictatorial streak in his make up that is gaining satisfaction from taking this unparalleled ministerial power.
The Minister said on Second Reading, and he repeated it in Committee:
we were taking powers more extensive and comprehensive than anyone had taken in similar circumstances, certainly in peacetime."—[OFFICIAL REPORT, Standing Committee E, 10th May 1972; c. 210–14.]
The Government are taking unparalleled secret directive powers, with no checks, no parliamentary surveillance and no accountability of any kind. I think that that should be most frightening to a democratic assembly.

Mr. Onslow: I should tell the right hon. Gentleman that my hon. Friend the Minister for Aerospace and Shipping is prevented from being present today because of the need to attend a meeting in Brussels. I hope that the right hon. Gentleman will reconsider what he said if he is suggesting that my hon. Friend has a natural predilection for taking powers of this kind.
The right hon. Gentleman described these powers in a colourful way, but I hope that because of his natural desire to be fair he will recognise that they are being taken in response to an unprecedented situation and that the House as a whole will realise that the situation requires us to act in this way. This is no preference on the part of my hon. Friend. He would be as happy as anyone if we were able to do without these powers.

Mr. Mason: I applaud the hon. Gentleman for rising to the defence of his ministerial friend in his absence. All that I was doing was quoting the Minister. When he said that these powers were wide, and "dictatorially so", he said, "Yes". He also said that the Government would get, through this Bill, more extensive and comprehensive powers than ever before in peacetime. I am not exaggerating, simply reminding the hon. Gentleman what the Minister said.
I should like to ask the Minister about these powers. What if Members of Parliament periodically ask preliminary questions about his use of them and do not wait for the annual digest of statistics? Will he reveal when these powers were used and for what purpose? Will the Parliamentary Commissioner be empowered to examine any alleged maladministration arising from the Minister's directives? Will constituents adversely affected by an airport manager accepting a directive be free to write to their MPs with a legitimate constituency grievance? What if lawyers are consulted by those suffering the effects of a directive? Can they seek the guidance of their MPs or parliamentary assistance? In brief, do not these massive secret powers stifle all our democratic processes and frustrate those who might disagree or feel aggrieved? Those questions need answering before we can allow the Bill to proceed further.
I repeat: the Minister has been granted unparalleled powers of directive and they are to be operated by secret notices. Our view is that Parliament should be informed. We would not expect security details to be revealed, but there is no reason why, within seven days, Parliament should not be aware that a directive power has been used, and should not be informed which airports or aircraft operations were involved. This could be done after the fact, so as not to jeopardise any action. It is essential that these powers are not abused and only by periodic parliamentary scrutiny can the Minister be held in check. That is the purpose of our new clause and I hope that it will receive the support of the House.

7.30 p.m.

Mr. Dan Jones: On Second Reading, I gave the Government almost unqualified support. In Committee, I did likewise, frequently to the chagrin of my party. I do not apologise for that, because I want the Bill. I am sure that I share that desire with the whole House and with all responsible people.
However, my right hon. Friend the Member for Barnsley (Mr. Mason) put forward reasonable objectives to what I agree are sweeping powers. The word "totalitarian" seems harsh and can hardly apply to a British Minister, but I use the word "sweeping" deliberately.
We should look at what we are sweeping away.
Under these powers, is it not true that surveillance at our airports will be conducted by special people—not even our own police force? This is a departure which can be agreed upon only after close scrutiny. I do not like any departure that sets up a police force separate from the constitutional one agreed through the ages by the House. Therefore, the Minister might stop and ponder.
My right hon. Friend asked what the position would be of our constituents involved in any delay at airports which are likely to be suspect, who might possibly—I am using moderate language—be mucked up. Are we to leave our constituents defenceless in those circumstances? Surely we must have the right to ensure that their interests are protected.
This is not a remote possibility. The travelling public has increased almost immeasurably and many people are comparatively naïve about air transport. People who are seeking no more than a holiday abroad could easily become involved with the sort of characters that we are so keen to outlaw. The question imposes itself upon us—how do we protect the interests of those who are our reason for being here?
My right hon. Friend also mentioned the Parliamentary Commissioner. I can speak with some small authority on that subject, since I have been working with that very valuable gentleman for some years now. Only today, we have been discussing extending his powers to investigate other than ministerial matters. Is he to be similarly immobilised under these provisions?
I am as anxious as I was months ago to get the Bill on the Statute Book, but one cannot lightly pass over the sweeping powers which amount to an almost total disregard of Parliament. My right hon. Friend should have the support of Conservative Members, too, if they are truly jealous of the preserves of this House. We must reconcile ourselves to the fact that we are precluding ourselves from a very important function.

Mr. Lewis Carter-Jones: I am always suspicious of reports. We included in the Chronically Sick and Disabled Persons Act—introduced by my hon.

Friend the Member for Wythenshawe (Mr. Alfred Morris)—a clause providing for an annual report describing what was being done technologically to help the disabled. We have had two such reports, both valueless. If we want to protest about them, we have to persuade the Opposition to provide time for a debate. I am sure that the Minister is not anxious to do that. Why can he not accept Amendment (a) to allow us the right to debate the reports that he will be producing?

Mr. E. S. Bishop: In view of the importance of the new clauses and the amendments, it is surprising that more concern has not been expressed about them. As my right hon. Friend the Member for Barnsley (Mr. Mason) has said, the clauses about which we are particularly concerned, Clauses 8 to 12 and others, give the Minister massive powers. In addition to referring to the new clauses we refer to the use of the terms "constable" and "other authorised persons".
I should like to deal briefly with that aspect. This is a very important measure which is agreed between the two sides of the House. Those of us who served on the Standing Committee expressed some concern about the use of the word "constable" without the prefix "police". We referred to this in our amendments. The Minister refers to "constables" in the context of the personnel who will carry out the duties involved in these powers and who will have to comply with the directives. There are various meanings of the word "constable", and without the prefix "police" there could well be misunderstanding.
We need to define not only the word "constable" but also the other persons authorised to act and to carry out the directives. Who are these constables to be? If they are to be police constables one presumes that the Minister would have tabled an amendment, or that at least the Under-Secretary would have indicated that he would be prepared to accept such an amendment.

Mr. Onslow: I am sorry to interrupt the hon. Gentleman, but I am not sure about the amendment to which he is speaking. There are later amendments about police but I am not sure that they can be taken with this debate.

Mr. Bishop: It is still relevant to refer to the word "constable" and to "police constables" because we are talking about the powers that the Minister is seeking. It was because of the doubts of the Opposition and some hon. Members on the Government side of the House about who these mysterious people were to be that concern was expressed about how the powers were to be operated.
Clause 12(5) states:
In so far as a direction under any of the preceding provisions of this Part of this Act requires searches to be carried out, or other measures to be taken, by constables, the direction may require the person to whom it is given to use his best endeavours to secure that constables will be duly authorised to carry, and will carry, firearms when carrying out the searches or taking the measures in question.
On Second Reading the Minister for Aerospace and Shipping said that only policemen——

Mr. Onslow: The hon. Gentleman is referring to Clause 12. This new clause makes no reference to that clause. I have a strong suspicion that the hon. Gentleman is anticipating a later debate—at least. I am fairly certain that he is not exactly within the bounds of order at present.

Mr. Arthur Lewis: On a point of order, Mr. Deputy Speaker. May I respectfully suggest that the Minister is not the person to decide this? If there is doubt whether my hon. Friend is in order, may I ask you, Mr. Deputy Speaker, to rule whether we can discuss this matter now or whether we should leave it until later? I wish to take part in the debate on this issue. I am speaking now, Mr. Deputy Speaker, to give you a chance to take advice on this matter. If my hon. Friend is to be ruled out of order and we have to discuss this matter later, we may miss the boat. Perhaps we may have your ruling.

Mr. Deputy Speaker: What the hon. Gentleman will do later is for him to decide. I was expecting that the hon. Member for Newark (Mr. Bishop) would not dwell too long on this point in this particular debate.

Mr. Bishop: I am grateful for your guidance, Mr. Deputy Speaker.
I was saying that because of fears which may be expressed when we discuss later amendments, the Opposition feel very strongly on the matter which is now before us. I end my brief reference to security forces and constables by saying that on Second Reading the Minister said that only policemen would be armed. One presumes, therefore, that he meant "police constables" and not "constables".
Be that as it may, the fact remains that, because of the massive powers which the Minister seeks, quite rightly, and the ways in which he is seeking to have the directives carried out, the Opposition feel strongly that the new clauses and the amendments should be thoroughly debated.
The Minister is given massive powers by the Bill. We consider the amendments necessary in order to safeguard the rights and property of millions of people who travel by air. We want to assess the extent of the powers and the need for proper accountability. Where there is power of this dimension there should be accountability to Parliament. Safeguards should be written into the Bill.
The Bill makes it an offence for any person to perform an act of violence likely to endanger an aircraft in flight or to damage an aircraft or facilities, or to pass on false information likely to endanger life or an aircraft or installations. There are severe penalties. The Bill also provides for arrest and for the extradition of offenders between contracting States and it requires such States to prosecute if they do not extradite those concerned.
Clause 8 and the succeeding clauses are very important. Clause 11 gives power to give directions. Clause 15 gives power to override a contract, Act or law to the contrary. That is a massive power. We are giving power to a Minister to make it necessary for people to break contracts to which they are committed and to exercise power under the Minister's directive in order to override Acts of Parliament. We contend that this alone requires and justifies the Minister reporting to the House about the use of his powers, especially if his powers are delegated to others.
The references to "police constables" and "constables" were an example of


the kind of concern which justifies the need for the accountability which we wish to write into the Bill. To override a contract could mean the loss of a job for someone or the loss of work for a firm or an airline. Broken contracts could cost many thousands of pounds in compensation. At present it seems that they could be broken without fear.
Those are some illustrations of the kind of power that the Minister seeks. My right hon. Friends and I are not quarrelling with his demand for such power, but we shall part company with him unless he accepts our amendments. There should be far more accountability to Parliament than is provided for at present. Although the consequences to the person under the contract may not be serious, if there is protection for him under the Bill one can rightly ask what will happen to the other party who may be affected by a failure to comply. If it means the breaking of a contract, what right of appeal will there be?
These questions arise from the need for proper accountability. The Minister may say that this has been taken care of. He went to some trouble in Committee to claim that compensation and the right of appeal were adequate for these situations, but surely that is not so. As some of our later amendments point out, changes are required to do justice to those who may be affected in consequence of the Minister's directions being carried out by those authorised to do so.
The Minister has admitted that these powers are serious. We do not argue about that. But surely the most serious matter of all is that the Minister asks the House to accept only an annual report, and a report which does not necessarily break down in any detail the powers that he has used or the effects on those concerned.
The Bill gives powers to unspecified persons. It refers to "authorised persons", and they need not be answerable to a Minister or to the Secretary of State. If the Minister is to exercise power through private security firms, there will be no control or answerability to Parliament. If he employs police officers answerable to a chief constable and the Home Secretary, there is accountability. With private security firms this is not the case.

7.45 p.m.

Our concern was echoed in Committee in another place by Lord Balfour of Inchrye, who is not a member of my party, when he said this:
I am sorry to be persistent, but I am getting exasperated. I have twice asked the Minister whether he will kindly explain to me the position when these powers are used by daily routine, which they will be. I am not talking about the emergency where everybody will accept that anything can be done, but about the daily routine. What redress, what machinery, what provision is there for the harassed, oppressed operator who finds the conditions under statutory rights very different from voluntary working? The Executive is asking for a blank cheque, without any undertaking that in the distant future it will not be used in an oppressive and even obstructive way. The question I ask again is: what will the Minister provide in the way of assurance that there is some machinery for redress or appeal, whatever you call it. I suggest that if the Committee is being asked by the Government to give a measure of power to the Executive without any safeguard to the citizen it will be very much better if the Minister takes this Bill back and thinks again."—[OFFICIAL REPORT, House of Lords, 26th February 1973; Vol. 339, c. 403–4.]

The misgivings which were expressed in the House of Lords and which resulted in the Bill being taken back and redrafted are still apparent and justified today. We must bear in mind not only the factors to which I have referred but also that those involved in the use of these massive powers must work as a team. There must be close liaison between many bodies and many people in Government Departments, at airports, in the Civil Aviation Authority, in the police, the airlines, pilots, cabin crews and many others. For that reason the National Aviation Security Committee was set up. There are many security committees at our airports and elsewhere.

The basic reason for our tabling the amendments and the clause requiring the Minister to bring statutory instruments to the House seeking approval of the use of the directives is the concern felt by the Opposition and by members of the Conservative Party. I wish that those Members were here tonight to express some of the misgivings which they voiced in Committee. It is the concern we have about the use of the powers by constables and private security firms which necessitates these safeguards.

We believe that those operating these directives and powers under the


Minister's command should be answerable to Parliament. We can ask: to whom will a member of Securicor or other private security firms be answerable? I shall be surprised if the hon. Gentleman accepts new Clause 4, which would enable him to set up a security force under his control—a force not privately run but answerable to him and, through him, to Parliament. It would be surprising because it would mean the end of hiving off the functions which should be carried out by the police. Doctrinal party considerations are making the Government put public security and safety into private, unaccountable hands——

Mr. Deputy Speaker: Order. Is not the hon. Gentleman discussing new Clause 4?

Mr. Bishop: I am discussing new Clause 4. The basis of my charge against the Government is that if these firms were under the control of a Minister or a Secretary of State——

Mr. Deputy Speaker: But the House is not discussing new Clause 4.

Mr. Bishop: Very well. If I cannot proceed on that line, I do not wish to anticipate a later debate. I should have thought it was obvious by now that it is the way in which the powers will be exercised that causes us these grave misgivings. If the police themselves, who are answerable to the chief constables and to the Home Secretary, were the people to carry out these directives, the fears of my right hon. and hon. Friends and I on this score would be allayed.
If the constituent of an hon. Member is detained against his will or searched against his will or treated in a way which he thinks is unreasonable, albeit by private security forces or by the police, what remedy has he? It is true that some safeguards are stated at the end of the Bill, but before these can be brought into play—at considerable cost to the aggrieved person—there is bound to be delay and possible hardship, some personal or business loss sustained, and there will be a loss of time and money.
If there is to be only an annual report to Parliament, which incidentally could be issued six months after the year has expired, have the public the right to ask

their Members of Parliament to bring the matter before Parliament? Can we seek to put Private Notice Questions? Can we table Questions asking about a situation which may have arisen at an airport or which may follow the use of the directives?
The Minister may say, with some truth, that matters of national security are involved in which he would not wish to have these powers exercised. I had better not mention security firms too often, so as to avoid anticipating our later debates. If someone is knocked down by a guard dog or is bitten or his clothes are torn, can the matter be raised in the House of Commons by that person's Member of Parliament?
If an aircraft is detained and it is afterwards thought that the detention was unnecessary, and if the airline suffers heavy loss through the aircraft being out of use for a few days—in the case of powers exercised under Clause 7, it may be necessary for the airline to charter another aircraft to enable it to carry out its obligations—can the matter be raised in Parliament? The Minister has a duty to tell the House to what extent he will be accountable to Parliament for the use of the directives.
The Minister has moved a new clause which goes some way towards what we want. I suggested on Second Reading that these massive powers should result in much greater accountability to Parliament and that as a very minimum there should be an annual report to Parliament.
Tonight we are suggesting that the Minister shall be required to bring forward a statutory instrument, albeit seven days after directives have been tabled, so that Parliament shall know what is going on and be able to say what it thinks. At present, although an annual report will be made, there is no guarantee that the House will be able to debate it.
The only other way of raising a matter which may aggrieve one of our constituents is to try to get a debate on the Consolidated Fund Bill. If we wait until, say, debate No. 17 on the night of the debate on the Consolidated Fund Bill, we might succeed in catching Mr. Speaker's eye and in securing the Minister's presence here at 5.15 in the morning to do justice to the aggrieved constituent. This


does not tie up with the Government's claim for more open government.
On Second Reading the Minister said this:
No nation is more rightly proud of the fundamental right of its citizens than we in Britain. No Parliament is more jealous of the protection traditionally afforded to individuals to pursue their lives, fully protected from the arbitrary use of power by civil or military authority."—[OFFICIAL REPORT, 4th April 1973; Vol. 853. c. 453.]
That comes very well from the Minister when he has said that there is no guarantee that the safeguards we seek will be forthcoming.
We could be sure that under the rules and procedures whereby we employ our police some of our misgivings would disappear or decrease. Our difference of view relates to security personnel who are not under such control. I refer to "cosh and carry" people with the private security forces who are equipped with weapons and who follow procedures which are not within the control of this House. I refer also to a code of conduct such as that which was sought by a Conservative Member who wished to bring in a Private Member's Bill to introduce a code of conduct.
If the Minister is sincere, as we believe he is, in stating that he wishes to ensure that our citizens are protected in their fundamental rights, I hope he will say that the Government are prepared to agree to these amendments, and are prepared not only to exercise the powers which we think they should have but also to exercise a justifiable and necessary degree of accountability.

Mr. Onslow: I fear that I shall have to disappoint the hon. Member for Newark (Mr. Bishop). One point which he made is a point which I had hoped the right hon. Member for Barnsley (Mr. Mason) might care to echo, and that is to remind the House of how my right hon. Friend stressed the jealousy with which we in Parliament protect the liberty of the subject. I do not believe there is anything in this Bill which is likely to make Members of Parliament any less zealous protectors of the interests of their constituents or the freedom of the individual.
It is unfortunate that the hon. Gentleman cast himself in the role of a power-

less mute unable to defend his constituents, unable to receive representations from them, and unable to seek by various devices, ingenious and unorthodox, to raise matters of importance and urgency on the Floor of the House. This kind of denigration does us little good because it is so far from the truth.
One need spend no more than 24 hours in the House to find out how anxious Members of Parliament are to stand up for the individual. To say that the individual ins being downtrodden and is denied redress is a gross distortion.

Mr. Bishop: I appreciate the hon. Gentleman's giving way. This is a very important matter. If the Minister says that he is not prepared to accept our recommendation that a direction should be confirmed by statutory instrument published within seven days of the service of the notice or direction, he will undermine his case. In a situation of an emergency or of some incident which is likely to cause grave national criticism or personal attack on the freedom of the individual, if he says that Private Notice Questions can be asked or that the matter can be raised in the House in various ways and that he is prepared to give information which he is not prepared to give as a matter of routine, he is undermining his case. His case is that he does not want to give the directives from time to time because of national security. If that is the case, it means that when Members raise matters affecting their constituents they will not receive a satisfactory reply.

Mr. Onslow: The hon. Member appears to have failed to listen to what I said. I was about to say to the right hon. Member for Barnsley that I thought that in quoting remarks made by my hon. Friend he was guilty of taking them out of context in a way which we should deplore. My hon. Friend was frank. He made no attempt to conceal the fact that the powers in this Bill are unprecedented. He did not revel in the fact that these powers had to be taken, but he did not seek to hide the fact that they had to be taken. No one will be happier than my hon. Friend or myself when these powers are no longer needed on the Statute Book. I thought it was unfortunate and unfair for the right hon. Member for Barnsley to get so excited


and so personal about this, because there was no justification for it, and I am sure that, on reflection, he will see the truth of what I have said.
May I go straight to a point raised by the hon. Member for Eccles (Mr. Carter-Jones). I will leave most of the points raised by the hon. Member for Newark because they will come up in later debates. I have carefully noted his points, so he need not repeat them, but I will certainly deal with them then. The hon. Member for Eccles asked about statutory instruments. I do not believe that the first amendment in line 2 to insert "in a statutory instrument" has been selected. However, it has been debated so I dare say that I shall be in order in speaking to it.

Mr. Carter-Jones: The hon. Gentleman has missed the point. The second amendment, after "stating", insert "(a)", covers the first amendment, and that second amendment is on the Paper.

Mr. Onslow: I know that that amendment is on the Paper. I will give the hon. Gentleman the answer to his point about statutory instruments. We do not think the amendment serves any useful purpose. There are means of laying reports as set out in new Clause 1 but it would not be appropriate to present such a report in the form of a statutory instrument. Section 1(1) of the Statutory Instruments Act 1946 defines "statutory instrument" for the purposes of that Act or any subsequent Act so that the expression is confined to documents exercising a power conferred upon Her Majesty in Council or any Minister of the Crown
to make, confirm or approve orders, rules, regulations or other subordinate legislation".
A report as envisaged in the new clause is not within this definition and, therefore, would not be appropriate in the form of a statutory instrument.

8.0 p.m.

May I now turn to the hon. Member for Burnley (Mr. Dan Jones)? I am grateful for his support and for the succinct way in which he expressed it. He has done his best to help us and I thank him for it. There is nothing in this Bill which prevents the normal processes of Parliament or prevents constituents approaching their Members of Parliament or Members of Parliament approaching

a Minister. The response in each case must depend upon the circumstances, in the same way as whether a given Private Notice Question or a motion is in order must depend upon circumstances which may vary from case to case, which cannot be predicted.

On the point about the Parliamentary Commissioner, I should expect that the same normal situation would apply in the case of any approach to him, but that there must be a need to safeguard security.

The hon. Member for Newark mentioned the issue of national security with which I had dealt in my opening remarks. I sought to put the onus of responsibility upon the other side of the House to justify the release in some detail of other information which did not fall within the category of threatening or affecting national security, but which nevertheless could affect the safety and security of individuals, which is important, though not the same thing. Therefore, since this point has been left unanswered I have to say that nothing has been said from the other side of the House which convinces me that our position is wrong.

I have also to say when we come to new Clause 2 that the great objection that I find to that clause is that I do not believe it would work in practice. The act of hijacking or sabotage against aircraft does not necessarily threaten the State and therefore national security, and yet we would all agree that the security of innocent passengers and aircrews, which is the purpose of this Bill, should be protected. Merely to permit the Secretary of State not to publish information deemed to be contrary to the national security, in a strict interpretation of that term, would not go far enough.

In practice, and bearing in mind the purposes of Part II of the Bill as set out in Clause 7, all directions and notices must involve an element of security, if not national security, in the objective of protecting aircraft, aerodromes, air navigation installations, passengers, aircrews and other persons against violence.

To seek to eliminate the security aspects in notices and directions before publication would make them largely meaningless and certainly provide insufficient information on which Parliament could decide whether they should be annulled. The exercise is therefore


somewhat otiose. Fourthly, security against violence is a continuing problem as hon. and right hon. Members on the Labour side must recognise.

Mr. Clinton Davis: The Minister says that if we were to have statutory instruments or some other form of documentation placed before the House from time to time it would be largely otiose because the information would not be available. Does he not concede, however, that we should at least know the incidence with which the Minister is invoking the Act? Otherwise we shall have to wait for a year and from year to year to know what is the incidence.

Mr. Onslow: Perhaps I may come to that in a moment. The crucial point in this whole debate is that security against violence is a continuing problem. It is not a seven- or nine-day wonder. It is not a matter of giving a direction which after seven days will no longer be applied or the security considerations will no longer be relevant. The Opposition know that and I hope on reflection that they will realise that it invalidates their argument.
If I can give an example perhaps I could cite the case of the recent threat by the IRA against Aldergrove Airport. This has necessitated wide-ranging additional security measures in Great Britain and Northern Ireland which might have been subject to directions had the Bill been law. It could be argued that not all these measures were strictly relevant to national security but they would be relevant to civil aviation security and it would therefore be wrong to disclose now, in seven days time or at any time while terrorism persists in Northern Ireland, the nature of those directions. I hope that hon. Members will appreciate that this argument is so strong that it underlines as few others could that security and secrecy are often quite inseparable.
Amendments (b), (c) and (d) are not acceptable. To disclose the effect of each notice or direction would be tantamount to publishing the notice or direction and this would seriously embarrass our security and be of immeasurable value to potential hijackers and saboteurs. To give details of the person receiving the direction will be of assistance to the wrongdoer who will simply transfer his

attention away from the airport or airline which he knows has been given a direction to one which he knows has not. It would not be practicable to state the duration of all notices and directions, but where it was, the hijacker or saboteur would merely have to wait until the direction had expired.
I have no doubt, and no one who approaches this matter with an open mind could believe otherwise, that the disclosure of such information, even though it might not be contrary to national security, would not be in the interests of the safety of airline passengers and air crews. This must be a guiding principle. I hope that the Opposition will withdraw their amendments because they seem to serve no purpose. They do not impute any wish on the part of the Government to exercise without answerability to Parliament dictatorial powers. They represent a reaction which we have had to make to a threat which we regret. The clause is a genuine and necessary attempt to meet the anxieties which were expressed in Committee.

Mr. Dan Jones: It is not quite good enough for the Minister to speak in those terms. This legislation waited for an interminable period before coming to the House, and I do not know how long it will take to get on to the statute book. During all that time the situation has been as was outlined by the Minister. With all due respect to the need to apprehend these unprincipled international louts, surely the Minister is not saying that there is no parliamentary procedure by which this House can be informed without conceding vital information to the people he has in mind?

Mr. Onslow: I am not telling the hon. Member that. It is a great mistake to allow oneself to be interrupted in mid-peroration. The provisions of the clause represent the furthest we can safely go towards giving Parliament information relating to the actions that we take under the Bill. In the interests of the security of those whom we wish to protect, we do not believe that we can safely go further. If we could I can assure the hon. Member that we should not hesitate to do so. I hope that the Opposition will withdraw the amendments and I hope we shall have the unanimous support of the House for the new clause.

Mr. Clinton Davies: Is the Minister saying that there is no conceivable way in which Parliament can determine the incidence with which the Minister is invoking this Act, that Parliament therefore has to wait from year to year to get any information about it in toto?

Mr. Onslow: I shall remind the hon. Member that I have dealt with his point. The ingenuity and persistence of Members of Parliament is the true measure of Parliament's freedom. It is no good the hon. Member arguing about that because it is true, and few know it better than he does. He asks whether Questions can be asked once a session, whether the matter can be raised under Standing Order No. 9, or on the Consolidated Fund Bill, or whether some other means can be found—for example on business questions. I cannot give a ruling on these matters but any Parliamentarian worth his salt knows that there are ways which can be tried.
Anxieties have been expressed about broken contracts, and about infringements of freedom and so on. They do not represent any concern which has been expressed to us by those who earn their living in these matters. The airlines and

their aircrews have not made representations. I deeply regret, however, that for some reason which escapes me the Opposition seem anxious to promote bogus conflict.

Question put and agreed to.

Clause read a Second time, and added to the Bill.

New Clause 2

NOTICE AND DIRECTIONS TO BE CONFIRMED BY STATUTORY INSTRUMENT

Any notice or direction required or authorised by any provision of this Act to be served or given to any person shall be confirmed by statutory instrument which shall be published within seven days of the service of the notice or direction as the case may be and which shall be subject to annulment in pursuance of a resolution of either House of Parliament:

Provided that the Secretary of State shall not be obliged to publish in such statutory instrument any information which he deems to be contrary to national security.—[Mr. Mason.]

Brought up, and read the First time.

Motion made, and Question put, That the clause be read a Second time:

The House divided: Ayes 145. Noes 152.

Division No. 197.]
AYES
[8.13 p.m.


Allaun, Frank (Safford, E.)
Fernyhough, Rt. Hn. E.
McBride, Neil


Allen, Scholefield
Fletcher, Ted (Darlington)
McElhone, Frank


Archer, Peter (Rowley Regis)
Foot, Michael
McGuire, Michael


Atkinson, Norman
Ford, Ben
Machin, George


Barnett, Guy (Greenwich)
Fraser, John (Norwood)
Mackenzie, Gregor


Benn, Rt. Hn. Anthony Wedgwood
Galpern, Sir Myer
Mackie, John


Bishop, E. S.
Ginsburg, David (Dewsbury)
Maclennan, Robert


Blenkinsop, Arthur
Gourlay, Harry
McNamara, J. Kevin


Booth. Albert
Grant, George (Morpeth)
Mallalieu, J. P. W. (Huddersfield, E.)


Bottomley, Rt. Hn. Arthur
Hatton, F.
Marks, Kenneth


Broughton, Sir Alfred
Hamilton, James (Bothwell)
Marquand, David


Buchan, Norman
Hamilton, William (Fife, W.)
Marsden, F.


Buchanan, Richard (G'gow, Sp'burn)
Hamling, William
Marshall, Dr. Edmund


Campbell, I. (Dunbartonshire, W.)
Hannan, William (G'gow, Maryhill)
Mason, Rt. Hn. Roy


Carmichael, Neil
Hardy, Peter
Meacher, Michael


Carter-Jones, Lewis (Eccles)
Harrison, Walter (Wakefield)
Mellish, Rt. Hn. Robert


Castle, Rt. Hn. Barbara
Heffer, Eric S.
Mendelson, John


Clark, David (Colne Valley)
Hooson, Emlyn
Millan, Bruce


Cohen, Stanley
Hughes, Mark (Durham)
Miller, Dr. M. S


Coleman, Donald
Hunter, Adam
Morgan, Elysian (Cardiganshire)


Concannon, J. D.
John, Brynmor
Morris, Alfred (Wythenshawe)


Conran, Bernard
Johnson. James (K'ston-on-Hull, W.)
Morris, Charles R. (Openshaw)


Cox, Thomas (Wandsworth, C.)
Johnson, Walter (Derby, G.)
Murray, Ronald King


Cunningham, Dr. J. A. (Whitehaven)
Jones, Barry (Flint, E.)
Oakes, Gordon


Davidson, Arthur
Jones, Dan (Burnley)
O'Malley, Brian


Davies, G. Elfed (Rhondda, E.)
Jones, T. Alec (Rhondda, W.)
Oram, Bert


Davis, Clinton (Hackney, C.)
Judd, Frank
Orbach, Maurice


Davis, Terry (Bromsgrove)
Kaufman, Gerald
Oswald, Thomas


Deakins, Eric
Lambie, David
Padley, Walter


Delargy, Hugh
Lamond, James
Paget, R. T.


Dell, Rt. Hn. Edmund
Lawson, George
Palmer, Arthur


Dempsey, James
Leonard, Dick
Pearl, Rt. Hn. Fred


Doig, Peter
Lestor, Miss Joan
Prentice, Rt. Hn. Reg.


Douglas-Mann, Bruce
Lewis, Arthur (W. Ham, N.)
Prescott, John


Dunn, James A.
Lewis, Ron (Carlisle)
Probert, Arthur


Evans, Fred
Loughlin, Charles
Rhodes, Geoffrey


Faulds, Andrew
Lyons, Edward (Bradford, E.)
Richard, Ivor




Roberts, Rt. Hn. Goronwy (Caernarvon)
Stoddart, David (Swindon)
Walker, Harold (Doncaster)


Robertson, John (Paisley)
Stott, Roger (Westhoughton)
Wells, William (Walsall, N.)


Rodgers, William (Stockton-on-Tees)
Strang, Gavin
White, James (Glasgow, Pollok)


Rose, Paul B.
Summerskill, Hn. Dr. Shirley
Whitehead, Phillip


Short, Rt. Hn. Edward (N'c'tle-u-Tyne)
Swain, Thomas
Williams, Alan (Swansea, W.)


Silkin, Hn. S. C. (Dulwich)
Thorpe, Rt. Hn. Jeremy
Wilson, Rt. Hn. Harold (Huyton)


Silverman, Julius
Tinn, James
Wilson, William (Coventry, S.)


Skinner, Dennis
Tomney, Frank
Woof, Robert


Small, William
Tope, Graham



Smith, Cyril (Rochdale)
Tuck, Raphael
TELLERS FOR THE AYES


Spriggs, Leslie
Urwin, T. W.
Mr. Ernest Armstrong and


Stallard, A. W.
Varley, Eric G.
Mr. John Golding.


Steel, David
Wainwright, Edwin





NOES


Adley, Robert
Harrison, Col. Sir Harwood (Eye)
Page, John (Harrow, W.)


Allason, James (Hemel Hempstead)
Haselhurst, Alan
Parkinson, Cecil


Amery, Rt. Hn. Julian
Havers, Michael
Percival, Ian


Archer, Jeffrey (Louth)
Hawkins, Paul
Pounder, Rafton


Astor, John
Hiley, Joseph
Powell, Rt. Hn. J. Enoch


Atkins, Humphrey
Hill, James (Southampton, Test)
Price, David (Eastleigh)


Awdry, Daniel
Holt, Miss Mary
Proudfoot, Wilfred


Benyon, W.
Hornby, Richard
Pym, Rt. Hn. Francis


Biffen, John
Hornsby-Smith, Rt. Hn. Dame Patricia
Raison, Timothy


Biggs-Davison, John
Howell, Ralph (Norfolk, N.)
Ramsden, Rt. Hn. James


Blaker, Peter
Hunt, John
Rawlinson, Rt. Hn. Sir Peter


Boscawen, Hn. Robert
Hutchison, Michael Clark
Redmond, Robert


Bowden, Andrew
Iremonger, T. L.
Reed, Laurance (Bolton, E.)


Brinton, Sir Talton
James, David
Renton, Rt. Hn. Sir David


Brocklebank-Fowler, Christopher
Jessel, Toby
Ridsdale, Julian


Brown, Sir Edward (Bath)
Kellett-Bowman, Mrs. Elaine
Roberts, Wyn (Conway)


Bryan, Sir Paul
Kershaw, Anthony
Rodgers, Sir John (Sevenoaks)


Buchanan-Smith, Alick (Angus, N & M)
Kimball, Marcus
Rossi, Hugh (Hornsey)


Burden, F. A.
King, Evelyn (Dorset, S.)
Rost, Peter


Carlisle, Mark
King, Tom (Bridgwater)
St. John-Stevas, Norman


Chapman, Sydney
Kinsey, J. R.
Sandys, Rt. Hn. D.


Churchill, W. S.
Kirk, Peter
Shaw, Michael (Sc'b'gh & Whitby)


Clarke, Kenneth (Rushcliffe)
Knight, Mrs. Jill
Shelton, William (Clapham)


Clegg, Walter
Knox, David
Soref, Harold


Cooke, Robert
Lane, David
Speed, Keith


Coombs, Derek
Longden, Sir Gilbert
Spence, John


Corfield, Rt. Hn. Sir Frederick
Luce, R. N.
Stainton, Keith


Crouch, David
McAdden, Sir Stephen
Stanbrook, Ivor


Crowder, F. P.
MacArthur, Ian
Stodart, Anthony (Edinburgh. W.)


Davies, Rt. Hn. John (Knutsford)
McLaren, Martin
Sutcliffe, John


d'Avigdor-Goldsmid, Maj.-Gen. Jack
McNair-Wilson, Michael
Taylor, Frank (Moss Side)


Dean, Paul
Maddan, Martin
Tebbit, Norman


Deedes, Rt. Hn. W. F.
Madel, David
Thomas, John Stradling (Monmouth)


Dodds-Parker, Douglas
Mather, Carol
Thompson, Sir Richard (Croydon, S.)


Edwards, Nicholas (Pembroke)
Maxwell-Hyslop, R. J.
Turton, Rt. Hn. Sir Robin


Eyre, Reginald
Meyer, Sir Anthony
Vaughan, Dr. Gerard


Fenner, Mrs. Peggy
Miscampbell, Norman
Waddington, David


Fisher, Nigel (Surbiton)
Mitchell, David (Basingstoke)
Wall, Patrick


Fookes, Miss Janet
Moate, Roger
Warren, Kenneth


Fortescue, Tim
Money, Ernie
Weatherill, Bernard


Fowler, Norman
Monks, Mrs. Connie
Wilkinson, John


Glyn, Dr. Alan
Monro, Rector
Winterton, Nicholas


Gower, Raymond
More, Jasper
Wood, Rt. Hn. Richard


Grant. Anthony (Harrow, C.)
Morgan, Geraint (Denbigh)
Woodhouse, Hn. Christopher


Gray, Hamish
Mudd, David
Woodnutt, Mark


Green, Alan
Murton, Oscar
Worsley, Marcus


Grieve, Percy
Nabarro, Sir Gerald
Younger, Hn. George


Grylls, Michael
Neave, Airey



Gummer, J. Selwyn
Normanton, Tom
TELLERS FOR THE NOES:


Hall, John (Wycombe)
Onslow, Cranley
Mr. Michael Jopling and


Hall-Davis, A. G. F.
Osborn, John
Mr. Marcus Fox.


Hamilton, Michael (Salisbury)
Owen, Idris (Stockport, N.)




Page, Rt. Hn. Graham (Crosby)

Question accordingly negatived.

New Clause 4

SPECIAL SECURITY FORCE

The Secretary of State shall have power to establish, or to authorise the establishment of, a special security force for the purpose of

executing all such acts as are required to be done pursuant to any notice or direction served under this Act.—[Mr. Mason.]

Brought up, and read the First time.

Mr. Mason: I beg to move, That the clause be read a Second time.

Mr. Deputy Speaker (Miss Harvie Anderson): I understand that it will be


for the convenience of the House if with this clause we discuss the following amendments:
No. 9, in Clause 9, page 8, line 36, after first 'by' insert 'police'.
No. 10, in page 8, leave out line 37 and insert:
'members of the special security force'.
No. 11, in Clause 10, page 10, line 16, after first 'by', 'insert police'.
No. 12, in page 10, line 16, leave out:
'or by other persons of a description specified in the direction'.
No. 17, in Clause 13, page 13, line 9, after 'a', insert 'police'.
No. 18, in page 13, line 10, leave out 'other person' and insert:
'member of the special security force'.
No. 22, in Clause 19, page 19, line 1, after 'constable', insert:
'or a member of the official security force'.
No. 23, in page 19, line 9, after 'constable', insert:
'the member of the special security force'.
No. 24, in page 19, line 16, after 'a', insert 'police'.
No. 25, in page 19, line 17, leave out:
'any other person specified in the direction'
and insert:
'a member of the official security force'.
No. 29, in Clause 25, page 23, line 38, at beginning insert 'police'.
No. 30, in page 23, line 39, after 'a', insert 'police'.

Mr. Mason: We are prepared to consider these amendments with new Clause 4, dealing with a special security force.
In our view, it is likely that private security organisations will benefit considerably from the Bill. According to the Bill, the cost of searching passengers and baggage at United Kingdom airports is already running at an annual rate of £600,000. If we take into consideration other security measures, the figure is probably at least £1 million a year. With the passing of the Bill another £50,000 at least is likely to be spent on guarding aircraft on the ground, but it could be much more.
Clause 23, which is discretionary, allows for Government reimbursement of moneys expended by airlines or airport managers if incurred as a result of a ministerial

directive. The explanatory memorandum states that
it is not possible to forecast what further expenditure might arise which under the terms of Clause 23 the Government may reimburse.
That is like granting the Government a blank cheque. Practically the whole of the extra expenditure for airline and airport security will be spent on private security forces and will further the growth of private security organisations.
The new clause seeks to establish a special security force, especially at our airports. It will be a body which will be used when the Minister is issuing his secret directives to protect an aircraft, an airline or an airport from piracy or sabotage. It will be a special security force which will be properly trained and qualified. It will be subject to public and parliamentary accountability.
The Opposition do not think that that is a job for the Securicor type of organisations. We are concerned that the Minister has that in mind. The Bill constantly refers to "constables" or "by other persons". It refers to the powers to be granted to constables or to other persons. Incidentally, it does not mention police constables. Although the Minister suggested in Committee that they might be airport constables, we are still worried about that loose terminology. Perhaps the Minister might be able to explain.
We think that constables should be established as at least police constables. We are worried about the phrase "other persons" because constables or other persons will have the powers to search aerodromes, aircraft, persons or property. They will have powers to guard aerodromes, aircraft, persons or property.
The Minister, in his directives, will he able to specify the search, the qualification of those empowered to search, the manner of the search and any apparatus, equipment or other aids for the purpose of the search and even if necessary, authorisation for constables to carry firearms. Nothing shall restrict the use of force.
Constables or any other persons specified in the order may arrest without warrant and detain for as long as necessary. That strongly infers that other persons—namely, Securicor, Chubb,


Group 4 or Security Express—may well be in line for new Government contracts and, what is most disturbing, for increased powers in their airport operations. Most of those powers will be given through a secret directive by the Minister. That is a most disturbing development.
Because of the strict security which must be maintained at our main airports, it is our contention that the Minister should appoint a special security force. It should be a highly-trained, qualified and properly vetted force which will be accountable to him and to Parliament.

Mr. Onslow: I rise to try to deal with the matters which the right hon. Member for Barnsley (Mr. Mason) finds so disturbing. If the situation were as he described it, I, too, should be disturbed. Clause 10, taken with Clause 19(2) invokes in respect of private security organisations only the powers of search. The use of firearms does not arise. That is not in the Bill and it should not be suggested that the use of firearms is concerned.

Mr. Mason: The hon. Gentleman is not listening to what I say. I purposely said, "even, if necessary, authorisation for constables …. "We do not know whether the constables will be airport constables, police constables or any other type of constable. The Bill just refers to "constables". If the hon. Gentleman had listened he would have heard me say specifically, "even, if necessary, authorisation for constables to carry firearms." It is in the Bill that constables or any other person specified in the directive may arrest without warrant and detain for as long as necessary.

Mr. Onslow: The right hon. Gentleman has mistaken my point. He was seeking to suggest that under what he is pleased to call secret directives the Government might intend to confer upon private security organisations powers which, he inferred—I think that that is the right word to use—might go as far as the use of firearms. I wanted to quash that canard instantly.

Mr. Mason: The hon. Gentleman will not listen and he will not grasp the point. I tried to point out specifically that constables may by directive be allowed to

use and to carry firearms. I have also mentioned the other terminology which is used in the Bill—namely, "other persons specified". Those persons may arrest without warrant and detain for as long as necessary. That is an extra power for a private force, for Securicor or any other body operating at an airport. It is that which causes us some concern.
It is already causing public concern that private police or private security forces are on the increase. About 100,000 persons are now engaged in the security industry. The turnover of these private companies is between £72 million and £80 million a year. Their operations are extending in many directions and when they are employed by Government Departments—especially the Home Office—Ministers refuse to reveal the payment for the contract or the nature of the contract.

8.30 p.m.

Mr. Alfred Morris: The Under-Secretary of State said that it is not intended to allow these "other persons" to have the use of firearms. Let us suppose they come up against people who have firearms in their possession. What then will their position be?

Mr. Mason: In the Bill, constables will be by directive allowed to carry firearms. The "other persons" will not be granted that, but they will be granted the extra powers to be able to arrest and detain indefinitely.

Mr. Arthur Lewis: The Under-Secretary of State has excluded firearms but we all know that the Securicor people already carry big truncheons. Is it not possible that these "other persons" could carry truncheons?

Mr. Mason: My hon. Friend is quite right. The Minister will be able to specify the search, the qualifications of those empowered to search, the manner of the search and
… any apparatus, equipment or other aids to be used for the purpose of carrying out any such search.
That is a wide power and it may well cover the point which my hon. Friend raised.
What we have here is a new dimension—that there is likely to be a further


major contract, secret in its scope and empowering these "other persons" by directive to arrest without warrant and to detain indefinitely. If the Minister intends to traverse this path, it is incumbent upon him to take ministerial control over all these persons and, in our airports, to have a properly trained security force which will be accountable to Parliament and the public. We are all aware that our official police forces are so restrained, and so should these "other persons" be restrained—persons to whom the Minister is granting these wide new powers. I hope that the hon. Gentleman will explain whether the official police have been consulted on the Bill and on the likely increase in the powers of private security forces at the airports.
I repeat the question which we posed in Committee: why not consider establishing by recruitment a full-time public sector extension of our own police force—in other words, a specialised airport security police? Surely the Minister would thereby be more content about the type of person recruited, the training and qualifications, the use of the powers and the prospect of tighter security at our airports. Above all, he would be giving visible warning to potential hijackers and saboteurs and greater assurance to the travelling public.
I have been brief and concise. I have tried to give the general purport of our proposals and I hope that in debate the House will gradually concede that this is what should be done, because, under the Bill, a new dimension is being granted to private security forces which, at our airports, could create gradually a more alarming situation than there is today.

Mr. Ernie Money: Many people who are deeply concerned about the increase in violence and the potential attacks on law and order with which this Bill is aimed to deal are also deeply concerned about the growth in general of what are sometimes referred to as private security forces. I should be grateful if the Under-Secretary, in replying, would deal with some points arising from Clauses 10 and 19. I take the points rather more narrowly than did the right hon. Member for Barnsley (Mr. Mason). I hope that my hon. Friend will deal with a matter which arose when the right hon. Gentleman inferred that the power, under

Clause 19(1)(b), of arrest without warrant and detention for as long as period as necessary, would apply to the persons described in Clause 10(1) as—
other persons of a description specified in the direction".
It would appear from the wording of Clause 19(1) that the word "constable" alone is used in that respect.
I hope that my hon. Friend can reassure the House that there is no question of persons other than properly sworn constables having these extremely Draconian powers. I hope that my hon. Friend can be specific about whether the word "constable" is intended to have anything more than its normal common law meaning. What would be perverse would be to see an extension of more than common law powers to other than properly sworn and attested constables.
What concerns the House is the definition of the right of search to other persons of a description specified in the direction. I hope that my hon. Friend can give an assurance that this will be limited to a properly approved body. I should like my hon. Friend to consider this suggestion.
One of the rather endearing features of the major airports in this country is that, for a reason which I cannot comprehend, they are administered, for prosecution purposes, by the Director of Public Prosecutions and not by the Metropolitan Police. At present even the smallest motoring prosecution at London Airport is initiated by the Director. Will the Minister consider seeking the approval of the Director for any body before it became a body which included persons of a description specified in the direction? There is cause for concern that before the system of licensing which has been advocated by private Members on both sides goes through searches could be carried out by persons whose characters have not been officially checked, and possibly carried out by persons with a criminal record. This gives rise to deep public concern and is counter-productive to the purposes of the Bill. I hope my hon. Friend will give an assurance that the approval of the Secretary of State will be limited to such bodies which satisfy him that they are the right people to have the powers to carry out the kind of search specified under Section 10. I suggest that the only people who have the


right character to be given these powers are those who could be sworn or attested as constables—in other words, people who have the normal character requirements for membership of the Metropolitan, or any other police force.

Mr. Alfred Morris: I implore the Minister not to mistake the strength or seriousness of the opposition to this provision which new Clause 4 seeks to correct. As is known, I act as parliamentary adviser to the Police Federation, which gives me a special interest in the new clause. My hon. Friend the Member for Newark (Mr. Bishop) said earlier that there were grave misgivings about some parts of the Bill. We are discussing what is perhaps the most disturbing feature of all. We accept that the Minister needs adequate powers to deal with aerial piracy and terrorism. We feel that he should report to Parliament on the use of the directives.
The principal question is how and by whom these powers shall be exercised. The principal concern among police officers is that there are more and more people in contemporary Britain who look like policemen but are not policemen. The attitude of the Home Office to the role of private police was first stated on 22nd September 1970 in terms which have now become all too familiar. The Home Office stated that it wanted to relieve the police of,
tasks which distact them from their primary functions of preserving the peace and bringing criminals to justice.
There will be hon. Members who feel that persons other than constables will now have increased powers to deal with the problems of preserving the peace and bringing criminals to justice.
The Home Office argument appears to be that the police are overworked and must not be burdened with trivial tasks. The question must be asked: Where does the argument that this is not police work stop? How many other activities are to be hived off to unregulated and unlicensed private security companies?
There is a manpower crisis in the Metropolitan Police Force. The way to deal with that is to improve the pay, conditions and status of police officers. It is no solution to hive off work to private security companies whose selection criteria are much less

rigorous than those of the police. The National Council for Civil Liberties has said that, in its view, parts of the Bill are deeply alarming. The Minister must not seek to brush aside the serious criticisms that have been addressed to him.
I find it deeply unsatisfactory that private security companies are able to recruit members of police forces with specialised skills by offering them higher salaries than those paid by regular forces. It will disturb the House to learn that, if we took every police officer from Manchester and Leeds and transferred them to the Metropolitan Police, there would still be vacancies in the metropolitan area. When I use the term "manpower crisis" to describe the situation in the metropolis, it can hardly be said that I am exaggerating.

8.45 p.m.

In Committee my hon. Friend the Member for Newark referred to a statement made by the head of Al Security, who spoke of the steps which he would have taken to clear Hornsey College of Art. He said that dogs should be used so that
If the students tried to get in or out my dogs would rip them to pieces".—[OFFICIAL REPORT, Standing Committee E, 15th May 1973; c. 274.]

Is that the sort of organisation to which we wish to entrust new responsibilities?

I said that I had a special interest in this debate. I believe that the public interest requires all of us to look very carefully at the new powers being sought by Ministers. I notice a new face on the Government Front Bench at this stage of the proceedings on the Bill. Another Minister replied to my hon. Friends the Members for Newark and for Hackney, Central (Mr. Clinton Davis) in Committee. I hope that the new face implies a new attitude.

The Minister must not mistake the strength or seriousness of our opposition. My right hon. Friend the Member for Barnsley (Mr. Mason) asked the Minister what consultation there had been on this important matter with the national representatives of the Police Federation. Police officers are all too often denied consultation by Ministers on matters about which they have helpful advice to give.

Mr. Onslow: The hon. Gentleman is being perfectly frank about his interest.
May I put a straightforward question to him? Has he at any stage of the Bill's progress through the House, in his capacity as employee, or whatever it may be, of the Police Federation, sought to make these points in representations to anyone in charge of the Bill?

Mr. Arthur Lewis: They were made in Committee.

Mr. Morris: I was not a member of the Standing Committee, as the Under-Secretary of State knows very well. The case against these provisions was argued with great force and clarity by my hon. Friends the Members for Newark and for Hackney, Central. If the Under-Secretary had done his homework, or if he had a closer rapport with the Box than he appears to have had tonight, he would have noticed that I have tabled a Parliamentary Question on this matter. He knows that police officers cannot be directly represented in the House. He knows that that is why his hon. Friend the Member for Bury St. Edmunds (Mr. Eldon Griffiths) and my right hon. Friend the Member for Cardiff, South-East (Mr. Callaghan) were my predecessors as parliamentary advisers to the Police Federation.
Instead of scoffing at my hon. Friend the Member for Newark, the Minister would do well to address himself to what is an extremely serious matter from the point of view of most people in this country. Instead of hiving off to the private sector and increasing the profits of the private sector, we should ensure that the public sector is properly manned. We all know that the public sector is not property manned. There is deep concern about this matter among police officers, as there is among other people.

Mr. Norman Tebbit: As a London Member I have deep sympathy with the police and their problems, as we all have. However, will the hon. Gentleman clear the record and say what advice he gave his federation about how it should approach my right hon. and hon. Friends and myself and others who served on the Standing Committee in order to make the points which he is making tonight—not generalised points about security organisations, but specific points about the opposition of police officers to the Bill?

Mr. Morris: When the Government want to consult the National Farmers' Union, they do not wait for Sir Henry Plumb to knock on the door of Whitehall Place.

Mr. Tebbit: What advice did the hon. Gentleman give?

Mr. Morris: They make contact with organisations which they believe to be affected by the provisions they intend to make in any proposed new laws. I was in frequent contact with my hon. Friends, as they will attest, during the Committee stage. I was not a member of the Committee, and this is my first opportunity to make what I regard as a serious case on behalf of those who would argue that new Clause 4 is essential and ought to be supported by both sides of the House.

Mr. Arthur Lewis: There was no need for my hon. Friend to go to the Minister on behalf of the Police Federation. The Minister knew, and all members of the Committee knew, as did the police, that every point which my hon. Friend is now putting was put and argued in Committee, and it was up to the Minister, having heard the arguments, to consult the Police Federation and to come here prepared for this debate.

Mr. Morris: My hon. Friend is eminently right. The points which have been argued tonight were repeatedly emphasised in Committee. In my view, my hon. Friends the Members for Newark and for Hackney, Central did not receive the replies which their arguments merited. The Under-Secretary of State seems to imagine that a Report stage is hardly necessary and that what was not said in Committee should not be said at all. He does not seem to understand what the Report stage is. Earlier, he posed as an expert on parliamentary procedure, telling us what we could do in relation to the Table Office, what we could do regarding Standing Order No. 9 debates and what we could do at business question time.

Mr. Carter-Jones: On an important matter like this, did not the Under-Secretary and his ministerial colleagues consult the Home Office? Are they dependent upon a back bencher for information?

Mr. Morris: My hon. Friend refers to the Home Office. The hon. Member for Epping (Mr. Tebbit) was referring to the Police Federation. It is felt—I hope that this will be taken seriously by the Departments concerned—that the Police Federation, consulted 100,000 people, is not adequately represented on a wide range of issues at present.
I hope that the Minister will carefully note what has been said from both sides of the House. The hon. Member for Ipswich (Mr. Money) expressed some concern from the Government back benches. I want the Minister to give proper consideration to the compelling arguments raised by my right hon. Friend and I hope that he will give a constructive response. If he does, he will, I believe, be serving the public interest.

Mr. Arthur Lewis: The Minister had the audacity, the cheek and the impudence to intervene during the speech of my hon. Friend the Member for Manchester, Wythenshawe (Mr. Alfred Morris) to ask him, as he represents the Police Federation, why he never came forward to put the Federation's case. The truth is that my hon. Friend the Member for Hackney, Central (Mr. Clinton Davis) and others of my hon. Friends consistently—almost day in, day out—put the case which my hon. Friend the Member for Wythenshawe has advanced tonight. They emphasised all the issues, and they explained them in detail.
It was surely incumbent on the Minister in the earlier debate to have said "We shall not turn down the proposal, but we shall consider it. We shall go away and ask the Police Federation to discuss the matter. We shall take advice from the Home Office and the interested bodies and then, on Report, we shall see whether we can do what the Opposition have in mind." That was the correct way of going about the matter. I remind the Minister that this is no laughing matter. It is very serious. It is not too late even now for the hon. Gentleman to say that, although for drafting or legal reasons he may not be able to accept the clause, he can accept the principle underlying it and will arrange to deal with the matter in another place.
I have tried for many years to emphasise the dangers involved in some of these security firms. What I have said has been pooh-poohed, but gradually people are coming to see the dangers inherent in the development of some of these firms. The hon. Member for Ipswich (Mr. Money) rightly pointed out that some of these security forces are unscrupulous organisations. I am talking not about the large organisations but the fly-by-night concerns. I am told on pretty good authority that the police have doubts whether some of the organisations are not in league with criminal organisations, and indeed that they may even have arrangements with them.
The facts are that there is no check whatever on these organisations. A criminal, having served his 20 years in prison, can be released and then take a job with the XYZ security force. A reputable firm, even a bank, not knowing these things could employ that individual and his firm to protect the wages deposited in the bank. Is it not ridiculous that a criminal can be invited into a bank and can then commit whatever misdemeanour he likes?
These are the sort of firms which might be employed by the Minister, because he does not know the sort of people who are employed. They might have criminal records. One of the top firms has said that it does not employ anybody with a criminal record. But how does it know? If Bill Sykes changes his name to Bill Smith and goes to a security firm for a job, that firm may well take the view that he is a good man for the job. That man will not go to the firm and say "I declare that I have served 20 years' imprisonment, I have just come out and I expect to get a job." Of course he does not do that. He says "My name is Bill Smith. I have just come from New Zealand where I have spent the last 20 years. This is why I have not got my insurance card." The firm will say "Very well, you look a nice respectable sort of chap. We shall employ you." How does a firm know whether the man has a criminal record? Are these firms in touch with the police, and are they advised by the police?
I suggest that we should be given more information about the organisations which will be employed at fees which have been undisclosed. The Minister has refused


to disclose how much money they will get. Employees of these organisations will be able to search and have all the powers one expects of the police.

Mr. Onslow: That is not right.

Mr. Lewis: The one exception is that they will not have the right to have guns.

9.0 p.m.

As I understand the position when the Bill left the Committee, there is nothing to stop these other bodies under directives from the Minister acting in association with police constables and taking part in searches and other activities. It is true that employees of these companies will not be able to carry guns. But what is there to stop them having truncheons? After all, they have them now. These organisations break the law day in and day out, and no action is taken.

I can explain how the law is being broken. I have asked the police to take action and they have refused. On any day of the week it is possible to see a Securicor van pull up on a double yellow line and stay there for as long as three-quarters of an hour without any police action being taken. If a commercial traveller carrying valuable goods stops on a yellow line for 10 minutes the police will have him, and quite rightly. I do not blame the police. But these security firms are allowed to get away with it.

Standing beside the security van there will usually be seen a uniformed man who looks very much like a policeman. On a warm day he will have removed his jacket or jerkin and he will be standing there wearing a blue shirt which is absolutely identical to that worn by the police in the metropolitan area. He will be wearing a dark blue tie. He will have a crash helmet on his head identical to that worn by a police motor cyclist. The other day I heard an old lady in Wood Green High Road say "There is a policeman standing outside that bank with a truncheon." She looked with fear at him. I said to her "He is not a policeman, dear." She replied "Oh, yes. He is standing there with his truncheon." What a truncheon it was! It was about three feet long—

Mr. Russell Kerr: Like a baseball bat.

Mr. Lewis: Yes, it is like a baseball bat. It is a much more offensive weapon than anything that our police are allowed to carry, and we have some control over our police. But they have only little ones about a foot long.
The employees of these security firms are in no way responsible to this House. But these are the sort of people who will be allowed to act above the authority of the ordinary police because they will have more power and more authority. If I am in the Wood Green High Road and I see a police constable who in my view is misbehaving, I can take his number, report the circumstances to the Home Secretary and the matter will be investigated. If the police officer is found guilty of some offence, he may be reprimanded. But in the case of the employees of security firms there is no means of identification and no possibility of reporting any misbehaviour to the Home Secretary. What is more, there is no provision in the Bill for a security officer accused of misbehaviour to have any right of appeal.
It is all very well for the Minister to say that an hon. Member can raise a matter of this kind under Standing Order No. 9. He knows that Mr. Speaker, with all his kindly generosity, would never grant a Standing Order No. 9 application, even to me. If I were to raise a matter concerning a man wearing a uniform resembling that of a policeman who was insulting a passenger at an airport, Mr. Speaker would laugh me out of court. What is more, even I would not have the nerve to ask Mr. Speaker for a debate on the matter under Standing Order No. 9.

Mr. Money: I have been listening with considerable interest and not a little sympathy to what the hon. Gentleman has been saying. Would he not agree that this is the strongest reason for checking and improving the character of the security forces concerned? The inherent difficulty, which arises from what was said by the hon. Member for Manchester, Wythenshawe (Mr. Alfred Morris), is that the Metropolitan Police are substantially under strength, and manning a special security force is not likely to solve that problem.

Mr. Lewis: The undermanning of the police force is to be debated tomorrow. There is something to be said about that.
My right hon. and hon. Friends have rightly suggested that there should be a highly-organised and trained force responsible to the Minister—or Ministers—answerable to this House. I suggest that there is nothing to prevent the establishment of such a force provided the Government offer good wages and proper working conditions.
If the XYZ security firm can pay double or treble the wages paid to the police, there is no reason why that kind of security force should not be set up, controlled and paid for by Parliament. If a security firm can get staff, why cannot we set up a police force—it can be called the Air Ministry Security Force if one likes—and pay proper wages? If staff cannot be obtained at the rates offered, they should be offered more. I am not particularly concerned about that aspect of the matter because that is the Government's problem. If we think that the principle is right, namely, that this sort of thing should not be left in private hands but should be dealt with in a properly organised way, it is up to the Government to see that they get the necessary personnel.
If the Government want extra men in the Royal Navy, the Army or the Royal Air Force, they do not leave things to private enterprise. They do not say that they will allow the XYZ private army, navy or air force to step in and make a profit. The Government offer good wages and salaries to Service personnel, but if they find that they are not getting a sufficient number of recruits they improve the wages and conditions. That is what they should do in this instance.
There is another aspect of the problem, and here I may tread on some corns. In Committee, my hon. Friend the Member for Hackney, Central asked a number of questions to which he received no answers. I wonder why. He asked in the House how much money was paid to one security firm for a contract, and the Home Office refused to give the information. Why was that? There can be no security reason for not giving the information.
Could it be that this security firm is in the habit of having on its board of directors prominent people connected with the establishment and with political parties in both Houses of Parliament?

Mr. Deputy Speaker: Order. I am sure the hon. Gentleman will recognise that he is going rather wide of new Clause 4 and the amendments.

Mr. Lewis: With respect, Mr. Deputy Speaker, I do not think I am. The clause suggests that a proper force should be established, and I am suggesting that perhaps one reason why the Government do not want such a force is that the directors of the firm which they now employ are connected with certain Ministers of the Crown.
I go on to say that one reason why the Minister is not in favour of the clause is that the Home Secretary was a director of the firm about which the Home Office refused to give information. I am developing the case. This is another aspect——

Mr. Deputy Speaker: Order. The hon. Member is getting very near to a point that is not acceptable, and I hope he will not pursue that line.

Mr. Lewis: Mr. Deputy Speaker, are we, or are we not, discussing a list of amendments and new Clause 4? Does not the clause suggest that a special security force should be set up? Is it not the case that we are trying to persuade the Minister to accept certain amendments? Am I not entitled to suggest that one of the reasons why he will not accept our proposals is that private forces already in existence and to which we object are doing this very job? Am I not entitled to suggest that I want to see these private organisations done away with because I object to the fact that they have on their boards directors who are members of both Houses of Parliament and include ex-Ministers?
The Chair, the Minister or the House may not like it but it is true. It may not be something that one would expect to be said in the House, but that is for me to decide if I want to say it. It might be that the Government would like to leave the work in private hands because it is one of the unsavoury sides of capitalism, or whatever term the Prime Minister used. We have an ex-Minister, Ray Gunter, who is also associated with the private force, so I am not being party political in my criticism.
This private force will have much more power and authority than our legitimate


police force. It will not be responsible to or controllable on a day-to-day basis by this House. My hon. Friend pointed out that its members have power to arrest without warrant. A constable has power to search while these other people can aid and assist under any directive which the Minister might issue, virtually anything can be done. But the ordinary policeman, whom we call the bobby on the beat, has to go through certain procedures. If he has a suspicion, he has to obtain a warrant. He is controlled. If he is rude or offensive, there are a hundred and one ways in which a complaint can be raised. We could go to the Commissioner or to the constable's chief officer and, if need be, ask Questions in the House or raise the matter with the Home Secretary. The Minister said that we could ask Questions upon the annual report being issued, but it would not be issued until 12 months afterwards and, frankly, who would then care what had happened 12 months earlier? I support my hon. Friends with the clause and the amendments.

Mr. Tebbit: It is worth commenting, first, on a couple of speeches by hon. Members opposite. The hon. Member for Manchester, Wythenshawe (Mr. Alfred Morris), I understand, said that while, in his capacity as parliamentary adviser to the Police Federation, he advised his hon. Friends, he did not at any time advise those of us on this side who sat on the Committee on the same Bill.

Mr. Alfred Morris: What I said was that serious reservations had been expressed by police officers about the Bill and that the Police Federation, representing 100,000 constables, sergeants, inspectors and chief inspectors, was not given consultative status. I argued as well that other Departments of State—for example the Ministry of Agriculture—should get the viewpoint of such organisations as the National Farmers Union. The onus is not on the federation. The onus is on Ministers to see that they are consulted——

Mr. Deputy Speaker: Order. The hon. Member has made his speech.

9.15 p.m.

Mr. Tebbit: I will leave the point by saying only that if I were the parliamentary adviser to the National Farmers Union and I thought that it was not being

adequately consulted, I would make sure that hon. Members on both sides, not only one side, knew it.
As for the hon. Member for West Ham, North (Mr. Arthur Lewis), we have seen him in two of his guises this evening. One of them was an unaccustomed guise, that of protector and friend of the police force. I am sure that this will cause a good deal of amusement to many of the constables whom I know in the Metropolitan Police Force and others.
As for the way in which the hon. Member spoke about security forces and about personal interests [Interruption.] If the hon. Member for Feltham (Mr. Russell Kerr) wants to make a speech, he should make a speech, but he had better not start his sedentary interruptions, please.
The hon. Member for West Ham, North was going on about undue influence. We can presume from his remarks tonight that he has not a public relations contract from any security force in this country at any rate. On that, I will leave the hon. Gentleman.
The right hon. Member for Barnsley (Mr. Mason) encapsulated this new clause, as I recollect his words, by saying that there should be set up a new public security force to ensure safety at airports.

Mr. Arthur Lewis: Will the hon. Gentleman forgive me?

Mr. Tebbit: No, I will not give way to the hon. Gentleman.

Mr. Arthur Lewis: On a point of order. Before you took the Chair, Mr. Speaker—Mr. Deputy Speaker was in the Chair and will verify this—the hon. Member for Epping (Mr. Tebbit), in an aside, made an innuendo against me. I understand that, under the rules of the House, innuendoes and aspersions on a Member's character must not be made. The implication of the hon. Member's remark was that I had a public relations position. I have no public relations job of any sort with any organisation, whether the police, Securicor or any other private firm. As hon. Members were present and know that this innuendo was made, I should like to ask the hon. Gentleman to withdraw it. I have no public relations job at all with any firm.

Mr. Tebbit: If it will help the House, I will repeat what I said. I said that it was quite clear from what the hon. Gentleman had said that he had no public relations contract with any security force.

Mr. Russell Kerr: It was an innuendo, and the hon. Member knows it.

Mr. Speaker: I am asked to rule on a point of order arising from matters which I have not clearly heard. I think that we had much better go on, had we not?

Mr. Tebbit: I am grateful, Mr. Speaker——

Mr. Russell Kerr: It must be a relief, too.

Mr. Tebbit: The hon. Member for West Ham, North asked me in essence to withdraw. In essence, I have repeated what I said and I think that that had better remain as it is on the record.
I was saying that the right hon. Member for Barnsley had said that there should be set up a new public sector security force to ensure safety at airports. This is something that has been echoed by other hon. Members. I have news for all right hon. and hon. Members: one was set up some years ago, and is called the British Airports Constabulary. I do not know what else they want. Certainly, this is a pretty glib, quick new clause—three lines to set up a new police force when one already exists. However, let us discuss—[Interruption.] The right hon. Member for Barnsley thinks that this is funny.

Mr. Mason: The hon. Gentleman said that he had news. He told us history.

Mr. Tebbit: The right hon. Gentleman could not have been aware of it, otherwise he would not have suggested setting it up. He would not have wanted to waste the time of the House.—[Interruption.] The hon. Member for West Ham, North has made his speech this evening, and I should be grateful if he would allow me to make mine.
Let us think of the practicalities of the new clause, of setting up this new police force. The key would be this: what would be the conditions of service of those employed? There are only three possibilities. They would be better than,

the same as or not as good as those of the existing police forces, including the British Airports Constabulary.
We do not have to have regard to whether those conditions of service and payment are adequate. For the purposes of this argument, that is beside the point. What is clear is that if the new force which the right hon. Gentleman wants to set up alongside the constabulary at the airport had better terms and conditions, it would take men from that force. If the conditions were worse, they would hardly be likely to recruit men of the calibre required who would not go into the British Airports Constabulary. If they were the same, I cannot see why the right hon. Gentleman has to propose a new clause merely to duplicate what already exists.
The essence of this matter is that the work of these people is not the same as ordinary police work. It is work which is done to some extent not merely by private security forces of the contracted-out sort but also by employees of airlines. It is dull, dreary and boring work. Happily, they are seldom called upon to do anything in the nature of an executive action by a policeman or to do work which is anything like that of a policeman. Probably most hon. Members have been frisked in some way at our airports by people who are very often employees of the airline concerned. As far as I know, this practice is not subject to abuse.
One need hold no brief for the way in which some security forces in this country are run. One need not argue about whether there is a need for legislation to control them. As it happens, I think that there is a very good case for legislation to control them. But that has nothing whatever to do with what the Bill seeks to do, and it has nothing to do with what the new clause would do to the Bill.

Mr. Carter-Jones: I am very rarely surprised at what takes place on Report, but what I find intriguing now is that the background to the Bill was prepared in such a slovenly manner and that so few people who ought to have been consulted were consulted. Perhaps the Under-Secretary will tell us clearly that the clauses referring to security were cleared totally by the Home Office, by chief constables and by the Police Federation. I assume that those consultations took


place and that, therefore, the Under-Secretary spoke with both knowledge and full approval.
The second thing that concerns me is that the Under-Secretary is now encouraging the lump in security. We discussed the lump generally quite recently. Apparently one does not recruit people properly for security but grabs a lump of people, without the necessity for them to be completely vetted and cleared by authorities. That is an extremely important factor. If there is a shortage of police and if private security forces contain reputable men, we should recruit those reputable elements into the public police force. Those who will not or cannot stand examination should be slung out. Those in security forces should at all times be completely above suspicion.
It is disgraceful and despicable for the Bill to encourage the lump. Last night the Government said that they did not like the development of the lump, whether in contracting, in lorry driving—or now in the more sensitive area of security.
The Under-Secretary should note the observation of the National Council for Civil Liberties:
Why has no consideration been given to establishing branches of the police force
—this meets the case put forward by the hon. Member for Epping (Mr. Tebbit)—
to cope with particular types of police work which might necessitate different kinds of recruitment and training but would still be under the overall control of the police and therefore subject to public and parliamentary scrutiny?
That is our point tonight.
The hon. Member for Epping says that such a force exists already. That force does not cover all the cases envisaged by the Bill.
It is strange that we are trying to get security in aircraft and at airports and at the same time, paradoxically, we are trying to improve Britain's image as a tourist attraction. Tourism is an important foreign currency earner. Yet visitors to this country are to be searched and screened by people who have not themselves been screened. Imitation police without responsibility or accountability are to examine visitors. This gives a totally false impression of British justice and the manner in which we conduct

relations between security forces and the public.
There will be difficulty about hon. Members raising matters concerning this type of security force in the House. The Under-Secretary talked about the trickeries, devices and schemes we sometimes use in seeking to get past you, Mr. Speaker. The hon. Gentleman should not encourage us in trickery. We should be able to raise these matters as of right. If the Under-Secretary, along with the Prime Minister, believes in open government, he should practise it and allow us to question Ministers about these people.
Where there are private security forces without accountability there are the seeds of Fascism. We should guard carefully against the upsurge of Fascism to ensure that the motives and behaviour of these people can be questioned in the House.

9.30 p.m.

Mr. Kenneth Warren: I was very upset by the way in which the hon. Member for Manchester, Wythenshawe (Mr. Alfred Morris) approached the problem of communications from the Police Federation to hon. Members, because it concerns me that an organisation like the police, who without doubt have very important views on a subject such as this, do not make certain that their views are given to Members on either side of the House who are interested in their well-being and in ensuring that the police are able to give the best service they can.
I know that the hon. Member does a good job for the police, but I hope he will take note of the fact that it would have been a welcome addition to our debating material in Committee if we had known what the Police Federation was thinking about this problem.

Mr. Alfred Morris: The hon. Gentleman is very kind and considerate in his comments, but he will appreciate my difficulties. I followed very carefully all the proceedings in Committee. It seemed that this was my opportunity, on the Report stage, to say something about the reservations which had been expressed to me.

Mr. Warren: I am grateful for that intervention. I will conclude the point by saying that never once between 17th


April and 17th May, when we considered the Bill in Committee, was the expression "Police Federation" recorded in the OFFICIAL REPORT. This draws attention to the need to know about the police views in our debates on the Bill.

Mr. Arthur Lewis: A point which must be made is that it is the normal custom for any Minister to consult the interested parties. For example, the Prime Minister is inviting the TUC to discuss phase 2. Surely it was up to the Minister to invite the Police Federation to come along.

Mr. Warren: The Minister can well answer for himself on this point and I will leave it to him.
Throughout the debate on Clause 4 in Committee this point never arose. Certain points relating to this matter were raised on Clause 9. The hon. Member for Hackney, Central (Mr. Clinton Davis) referred to the problem of the security people and of the police, and said:
Many police officers in London and elsewhere look like the Walls ice cream men as we knew them before the war."—[OFFICIAL REPORT, Standing Committee E, 10th May 1973; c. 250.]
Later he said that he did not believe that Securicor or other private bodies should enter into contracts with the Government. That was the nearest we ever got to this point.
To sit here and listen to the hon. Member for Eccles (Mr. Carter-Jones) casting some pretty nasty slurs on the standards of conduct, reliability and good nature of the members of the private security firms and of the airlines, who, on a 24-hour basis, seven days a week, 365 days a year, give to the travelling public a sense of safety and security which they have every right to expect——

Mr. Carter-Jones: I did not launch an attack on the airlines or on those employed by the British Airports Authority. The basic point is that they are completely vetted and there is a distinct line of answerability. This does not exist in Securicor and other similar organisations.

Mr. Warren: I am sorry, but I think that the hon. Member for Eccles is speaking with a considerable lack of knowledge of the subject. There is a far greater likelihood that the members of the private

security firms have been screened than even the staff of the airlines. The staff of the airlines have to take this job on and they do it extremely well. To the best of my knowledge, there has never been an occasion recorded in this country of anybody, except one Arab gentleman, complaining that he was to be screened by these people. The tremendous number of searches which they have carried out have never led to any general protest. The number of arms and dangerous weapons which they have managed to pull out of passengers' baggage has been a mark of the assiduousness with which they carry out their difficult duty.
Whatever Labour Members may say about them, I think that those people have for a long time done a very difficult job very well. I should not like hon. Members to leave it on record that there was any doubt about the character or integrity of these people, who, while carrying out their normal duties, render the public a considerable service.

Mr. Clinton Davis: May I put the record right? As reported at column 283 in Committee, I referred to the attitude of the police in these matters, and this fact was repeated throughout the speeches of my hon. Friend the Member for Newark (Mr. Bishop) and myself in the debates.

Mr. Warren: But that was getting on a bit and by that time we were well past Clause 4. The clause numbers were then in double figures. I hope that the House will not accept the clause, which I consider to be superfluous.

Mr. Peter Archer: We are here discussing a narrow issue. The hon. Member for Epping (Mr. Tebbit) says that a civil airports police service is already in existence. The Opposition have not overlooked that fact, but that is a statutory force publicly-controlled and publicly-paid. The issue we are debating is whether duties which are set out in Clauses 10 and 19 should be carried out by a private force, privately controlled and run for private profit.

Mr. Tebbit: The hon. and learned Member is not correct. The House is discussing new Clause 4, which is designed to set up a new State police force.

Mr. Archer: No doubt the hon. Member will direct his attention to the issue as he sees it.
We are concerned with the issue which we have formulated more than once. I am tempted to take up the arguments as they were made in Committee and as they have been ventilated tonight. They have all been fully ventilated. As I understand it, it is not challenged that the official police force is the force best qualified to carry out those duties in dealing with the public in the situations envisaged in the Bill.
It is not challenged that the official police force is more amenable to control by the public authorities and this House. It is not challenged that, if only limited finance is available, it should go into the pockets of the men doing the job and not into the pockets of shareholders of private security firms. It is not challenged that any shortage of police manpower is best met by paying reasonable salaries and offering reasonable working conditions.
As I understand it, the Government are left with only one argument, the argument used by the Minister in Committee when he spoke of the "peakiness" of the problem. Some of us who have come here tonight with open minds would like to hear him develop that argument, because these questions remain unanswered. First, we know that there are a number of problems with which the police forces are regularly concerned which are peaky in precisely this sense. It is not unusual for a particular situation to make demands upon reserves of manpower in a police force, and in these circumstances men are drafted from more routine duties to attend to the demands of the moment. We should like to know whether the Government believe that police organisation is so inflexible that the police forces are not capable of drafting men in that kind of situation.
Are the police organised without any reserves so often that, when there is a sudden call on manpower, they are incapable of dealing with it? It might assist the House if we were told how many men are likely to be involved in these duties. How many massive divisions are the police required to draft to carry out the limited searches envisaged in the Bill?
The Minister chided my hon. Friend the Member for Manchester, Wythenshawe (Mr. Alfred Morris) for having failed previously to make representations to the Government on this matter. Perhaps we might be told whether the Government have carried out the obvious exercise of asking the police authorities about this matter. Have they asked the police authorities how many men they envisage are likely to be needed? Have they asked whether their organisation is sufficiently flexible to cope with a seasonal demand? Have they received any answers on this matter from the police?
I can be extremely brief on the second question. If demand is peaky, in the sense in which the Minister used that word, are the private security agencies any better qualified to cope with it? How many men do they have standing idly by waiting for a seasonal demand? If they do not have reserves waiting idly by for this purpose, how do they deal with a sudden demand for manpower? Do they suddenly recruit more men? If they have to recruit suddenly in response to a particular demand, are they in a position to carry out the scrutiny of their recruits which work of this nature obviously requires? Are they in the best position to recruit the right personnel at such short notice?
The question that the Minister must answer to satisfy the House is why the private security organisations are better qualified than the regular police to meet a peak demand. If he fails to answer this, he is left with no argument at all.

Mr. Onslow: The hon. and learned Member for Rowley Regis and Tipton (Mr. Peter Archer) made some assertions which I challenge. He said that a number of propositions were going without contest. I contradict him at once. They are challenged and I will challenge them——

Mr. Peter Archer: rose——

Mr. Onslow: —if he will allow me to get to that point.
This has been an important debate and I should like to deal fully with the substantial issues which have not been touched upon by all hon. Members who have taken part.
There are two comments that I must make. The first concerns the hon. Member for West Ham, North (Mr. Arthur Lewis) who is so sensitive of his honour and so quick to reject any possible aspersion or innuendo. Would it not be a pleasant change if he showed the same sensitivity when he levels charges at others? Why must he remind us that it is possible to leave a trail on the pages of HANSARD without moving from one's seat? Why must he make accusations, which he knows to be baseless, and resent so bitterly when hon. Members take exception and retaliate?

Mr. Arthur Lewis: What accusations?

Mr. Onslow: If the hon. Gentleman rereads his speech, as I dare say he will, and understands what he said, he will know what I mean.

Mr. Lewis: I made a statement of fact. I said that there are directors of these firms in both Houses.

Mr. Onslow: I think it is within the recollection of every hon. Member in the Chamber that the hon. Gentleman went a great deal further than that, and a great deal unpleasantly further. I have no wish to dwell on what he said. It has been said, it should not have been said, and it is best left.
I address my second comment to the hon. Member for Manchester, Wythenshawe (Mr. Alfred Morris). I will come to the matter of consultations with the police later. I repeat the sense of my question to him. If he now claims, on behalf of the Police Federation, to raise matters which are relevant, it is leaving it a bit late. After all, it is possible to write a letter to a Minister. If an hon. Member cannot find an opportunity on the Floor of the House to make his point, if he is not fortunate enough to be called on Second Reading or selected to serve on the Committee, it is not beyond the wit of man to put pen to paper and pass on a message.

Mr. Alfred Morris: rose——

Mr. Onslow: What the hon. Gentleman said tonight would have carried more conviction with me if I had not recognised that more than one passage was a verbatim quotation from a document issued

by the National Council for Civil Liberties.

Mr. Morris: The hon. Gentleman must understand that I was making the general point about a lack of proper consultation with the Police Federation on a whole range of matters. I was satisfied on reading the reports of the Committee stage that the reservations of policemen were being argued with compelling force by my hon. Friends. I hope that the Minister will accept that this was my first opportunity to intervene directly.

Mr. Onslow: It may have been the first opportunity that the hon. Gentleman has had to catch your eye, Mr. Speaker. I will concede him that, but nothing more. However, if it is the first opportunity that he has found, he has not been very diligent in his task.
I turn to the matters of substance with which the clause is concerned.

9.45 p.m.

The right hon. Member for Barnsley (Mr. Mason) was guilty of some exaggeration. It is not true that there is any power likely to be conferred upon members of private security organisations to hold people indefinitely in arrest. He is wrong about that as he is wrong in suggesting that the Government employ any members of security organisations in connection with any of the work of aviation security.

I echo what was said by my hon. Friend the Member for Epping (Mr. Tebbit). My hon. Friend made a constructive and successful attempt to put the issue in perspective. I hope that there is general agreement on both sides of the House that there are not enough police available to carry out all security duties at our airports and specifically the searching of passengers and baggage, that searching is a wasteful use of highly-trained police resources, that the police do not like searching duties which they do not consider are duties proper to police officers—[Interruption.] If the hon. Member for Manchester, Wythenshawe wishes to contradict that statement I shall give way to him. I hope that there is general agreement that some alternative non-police resources are required to undertake the security measures, such as searching of passengers and baggage, guarding of property including aircraft and controlling access, at our airports which are


essential to protect passengers, aircrews and property from hijacking, sabotage and other acts of violence.

So that there may be no doubt about the matter, in the preparation and discussion of this legislation there was consultation throughout with the police, both through their representatives on the National Aviation Security Committee and by the Home Office. The Home Office's contact has been with the Association of Chief Police Officers. No representations have been made to the Home Office by the Police Federation. It is reasonable to infer from that that it had no representations which it wished to make.

At the present time the searching of passengers and baggage at our airports is undertaken in large measure by private security organisations employed by British and foreign airlines. The powers of members of these organisations to search or arrest or to use force are exactly the same as those of any other private citizen. The searching which is undertaken at the present time does not depend upon any powers available to private security organisations but is carried out with the agreement of passengers and with the backing of the conditions of carriage of the airlines which can decline to carry a passenger and his baggage if he refuses to be searched.

There is in my view no threat to civil liberties. All the airlines are saying is, "If you come on our aircraft you must be searched because we believe on the advice available to us that this is necessary in the interests of all our passengers and aircrews as a precaution against hijacking and other acts of violence." There is no compulsion. There is no more compulsion to do so than there is to ride a motor cycle or perform any other act. If a passenger considers his civil liberty to be threatened and he does not wish to be searched he is free to walk away and to try to find another airline which will carry him without requiring him to be searched. But as there is no compulsion on him, nor can he expect the airline to waive the searching process in his case, thus possibly placing at risk the other passengers who were ready and willing to be searched in the interest of their own security.

Mr. Peter Archer: Is the hon. Gentleman saying that passengers have a choice because they can either submit to being searched by a private security organisation or not be carried on the aircraft?

Mr. Onslow: No, it is not invariably that way. They may be searched by employees of the airline. I do not know whether the hon. and learned Gentleman draws such a distinction. Being a passenger in an aircraft involves accepting certain conditions such as not smoking, fastening seat belts or being searched before going on board. These are facts of life, and in many respects welcome facts of life, in civil aviation.
Under the Bill as drafted there will be no material change in the existing routine searching of passengers and baggage. As I have emphasised on many occasions the present voluntary system will continue, but where a direction is necessary and is given under Clause 9, it cannot compel the searching of passengers. All the direction can do is to require that passengers and baggage shall not be allowed on board the aircraft unless they have been searched. The Bill confers no powers on anyone to undertake a search following a direction under Clause 9. No direction given under the Bill can give a private security organisation special rights of search or arrest except that any persons who are specified in a direction given under Clause 10, in accordance with that clause, may exercise the special rights conferred upon them by Clause 19(2) involving the compulsory searching and detaining of persons and property on aerodromes, and the right of entry by force, where there is reasonable cause to suspect that a dangerous article is on, or is to be brought into, the aerodrome.
I agree that such persons could include the employees of private security organisations if specified by the Secretary of State, but in practice they would almost certainly be policemen. Directions to undertake random searches are likely to be necessary only in response to specific threats. They would be on an ad hoc basis and we could reasonably expect that the police would be able to undertake such searches, which present a vastly different proposition from routine daily searches of large numbers of passengers


and baggage, which would be beyond the resources of the police.
However, it is conceivable that circumstances could arise—for example, a number of consecutive bomb threats involving random searching—in which the police could not meet the demands made upon them, and in those circumstances it might be necessary for the Secretary of State to authorise the use of private security organisations if civil aviation were to be kept going at all. We think it prudent to seek such a power, but I can assure the House that it is not the Government's intention to give directions to permit the use of private security organisations on random searching other than in the most exceptional circumstances.
It is against this background that the proposal by the Opposition to establish a special Government security force, needs to be considered, and specifically how such a force would improve on the existing system, which I believe should continue.
First, there is no significant evidence of which I am aware that the private security organisations are inefficient in the three main categories of duties—searching passengers and baggage, guarding aircraft and installations, and controlling access—which they are carrying out at our airports, or that a Government security force would be any more effective.
I admit that there has been one case recently where someone seems to have been asleep at his post. But anyone who has ever been responsible for turning out sentries in the Army knows that a man may fall asleep at his post, and it makes no particular difference by whom he is employed. Whilst I am no apologist for any particular security organisation, I think it is fair to see the perspective of the whole situation. Certainly, where failures occur, they must be investigated and action taken, but it is wrong to draw general conclusions from isolated events.
This brings me to my second point, which is that the main requirements in searching are that it should be done efficiently and with courtesy. The House has already been told, but perhaps I can remind it, that in over two years my Department has received only one com-

plaint about searching by non-police personnel. The complaint was concerned essentially with the principle and related not to the personnel of a private security organisation but to airline security personnel.
This statement, when made to the House before, received some publicity and hon. Members will agree that it could have attracted correspondence if there had been any general sense of grievance. In fact, since the Committee stage, we have received only two further complaints and both were concerned with the principle rather than with the way searching was carried out.

Mr. Alfred Morris: This is an important point. May I——

Mr. Onslow: Then let me finish it. About 3 million airline passengers have been searched already this year and the vast majority have been searched by employees of private security organisations.

Mr. Morris: The hon. Gentleman was on an important point. He says that people must be dealt with courteously. Supposing a passenger feels that he has not been dealt with courteously by the private policeman or the security personnel. Will there be a complaints procedure as there is in the case of the police force? Does the hon. Gentleman envisage something of that sort in this case?

Mr. Onslow: I know that the hon. Gentleman is doing his best to make a comeback, but he should be able to do better than that. If he does not know how to complain and cannot write a letter to the airline concerned, or find some other way of making his grievance known, he can take the last resort and write to the Department of Trade and Industry. As I was saying, we have had three complaints during a period in which 3 million people have been searched.
The third point I wish to make touches on the matter raised by the hon. and learned Member for Rowley Regis and Tipton. The need for searching varies in intensity from time to time and it is therefore necessary to be able to adjust the number of personnel engaged on searching both upwards and downwards according to the circumstances. Inevitably private security organisations are


in a much better position to adjust to the demand than would be the case with a Government security force or a police force. If the hon. and learned Member suggests that a Government security force should employ on an established basis so many personnel, men and women, that it would be able to meet any possible contingency, not only would it be extraordinarily expensive but many of those employed would have nothing to do year in and year out other than sit on their hands. Flexibility is an important factor in responding to the threat to our civil aviation and one which the private security organisations are well suited to meet.
As the hon. Member for Eccles (Mr. Carter-Jones) has said, we are concerned with the protection of passengers, aircrew and ground crew, our constituents and foreign visitors, from attacks of violence by terrorists and criminals. Some hon. Members have forgotten that. I have not been as aware as I should have wished that Opposition Members understand the nature and seriousness of the threat.

Mr. Dan Jones: We do.

Mr. Onslow: I give the hon. Member for Burnley his due: he understands it. I have also not understood that every hon. Member understands how boring is the work of searching passengers. It is infinitely more boring than listening to the speeches of the hon. Member for West Ham, North. The people doing the searches have to grub around among dirty shirts and socks and pry into sponge bags and feel inside shoes. This is the situation, and the right hon. Member for Barnsley (Mr. Mason) knows it.
This is an appropriate moment to turn to the question of the definition of the word "constable". I was about to come to this. The effect of the Opposition's amendment is not quite as straightforward as has been suggested or as they think.
In modern legislation the word "constable" is used without the qualification proposed in the amendment. There are many examples of this, including Section 37 of the Civil Aviation Act 1949, various sections of the Police Act 1964 and Section 31 of the Civil Aviation Act 1971. In practice the term covers all members of any rank of the regular police forces

and special constables maintained under the Police Act 1964, and also members of such special forces as the British Airports Authority Constabulary. It does not extend wider to cover persons such as the employees of private security organisations who are not policemen. The Bill does not and cannot create constables.
If the expression "police constable" were to be used in certain parts of the Bill, the courts, if the matter went to them, would have to attribute some meaning to it. It is possible that they might interpret it as meaning only a person of the rank of police constable. At any rate, they would probably reason that Parliament must have intended the word "police" in this context to have some limiting or qualifying effect, so that "police constable" must be narrower in scope than the word "constable" taken by itself.
One possible result is that the courts would hold that in the Bill "police constable" was limited to members of the regular police forces maintained under the Police Act 1964 and did not include other constables such as members in the constabulary maintained under the Airports Authority Act 1965—the British Airports Authority Constabulary——

It being Ten o'clock, the debate stood adjourned.

BUSINESS OF THE HOUSE

Ordered,

That the Protection of Aircraft Bill [Lords] and the Pakistan Bill may be proceeded with at this day's Sitting, though opposed, until any hour.—[Mr. Kenneth Clarke.]

PROTECTION OF AIRCRAFT BILL [Lords]

Question again proposed, That the clause be read a Second time.

Mr. Onslow: I had just described the situation which would result if these amendments were enacted. I have to tell the House that the result is not one which we are seeking to achieve. The BAA constabulary must be in a position to carry out searches under the Bill, if its proposals are not to be frustrated. The Bill must make this clear beyond doubt. I cannot therefore advise the House to accept the amendments the consequence of which might be to limit drastically the resources available to combat violence


against passengers, aircrew, aircraft and other property at our airports.
I hope that the hon. Member for Hackney, Central (Mr. Clinton Davies) will understand that I have to anticipate the points which he may make because it falls to him rather than to me to wind up the totality of the debate. It may be that some of the things I am saying are superfluous but I am not in a position to judge that because no Labour Member has spoken to these amendments so far. Concern has been expressed that members of private security organisations might be authorised to exercise the powers given to constables in the Bill by being sworn in as special constables and thus becoming constables within the meaning of the Bill. Constables cannot be created under the Bill. Special constables are appointed under Section 16 of the Police Act 1964 and their appointment is entirely within the discretion of the chief officer of police for each area.

Mr. Bishop: Before the hon. Gentleman leaves this point, will he clarify something which arose on Second Reading when the Minister said that only policemen would be armed? Presumably he meant police constables. However, Clause 12 says that constables will carry firearms and that, presumably, does not necessarily refer to police constables.

Mr. Onslow: I think the hon. Gentleman is wrong because it seems extraordinarily unlikely that the Bill would contradict itself.
I take up a point raised by my hon. Friend the Member for Ipswich (Mr. Money). He was concerned about the possibility that any persons specified in a direction under Clause 10 in accordance with that clause may exercise the special rights conferred upon them by Clause 19(2), involving the compulsory searching and detaining of persons and property on aerodromes and the right of entry by force, if they have reasonable canse to suspect that a dangerous article is on or is about to be brought on to the aerodrome. Such persons could include the personnel of private security organisations.
Again in practice they would almost certainly be policemen. Directions to undertake random searches would be in response only to specific threats and it

would be only on rare occasions, in my view, that it would be necessary for this power to be extended to employees of private security organisations.
The other point about which my hon. Friend asked concerns Clause 19(1) and the reference to constables. I hope that I have succeeded in satisfying him that the reference is only to constables. I have had to cover a lot of ground. I hope that I have managed to deal with most of the points that have arisen as well as anticipating some about to be mentioned by the hon. Member for Hackney, Central.

Mr. Clinton Davis: About the only straightforward part of the Under-Secretary of State's speech was the way in which he dodged all the central issues. The manner in which he and some of his back-bench colleagues sought to obscure the Government's grotesque failure to consult the Police Federation with a scathing and unnecessary attack on my hon. Friend the Member for Manchester, Wythenshawe (Mr. Alfred Morris) was spiteful and malicious and was unworthy of them. It was elementary to have gone to the Police Federation about this matter. I am grateful to my hon. Friend the Member for Wythenshawe for coming back from Manchester specially to participate in this debate. I am also grateful to him for the help which he offered those of us on the Opposition Front Bench in Committee. The amendments which we tabled were a direct result of the concern expressed by the Police Federation about the Bill.
The Under-Secretary of State dealt briefly but very rapidly, as he is wont to do when he is in trouble, with why the Government left out the word "police" in describing a constable. I found his explanation, as far as I could follow it, extremely unconvincing. I do not see why it could not have been made specifically and abundantly clear that the powers to be exercised by constables were to be exercised by police constables. It was not we on this side of the House but the hon. Member for Walthamstow, East (Mr. Michael McNair-Wilson), who is not present, who raised the issue.
I pass to the two main themes of the debate. Vast powers have been taken by the Government to deal with the protection of civil air transport against acts


of violence. We have never demurred from the fact that such powers are necessary or raised any argument about that matter. It was unworthy of the Under-Secretary to raise that here. We regard it as a serious threat. It is not for the Government to express their bona fides about that, because it was the Home Secretary who allowed an Arab hijacker who had been sentenced to a term of imprisonment to be released. That is not the best way to show one's bona fides in dealing with this serious threat.
The second main theme is how these vast powers—and it is incontestable that they are vast, although the Under-Secretary of State made light of them—are to be carried out. The Government repose their faith in the private security firms. They are the mysterious "other persons" referred to in the Bill. They are to be used on an extended scale. The Under-Secretary makes light of the matter, as did the Minister in Committee. They are not renowned as over-zealous guardians of civil liberties. They are rather uncaring about these matters. However, we on this side of the House believe that the powers which they are seeking to invoke for private security firms are too great and that it is unhealthy to enlarge the scope of such firms. Enlarging them into the public as against the private domain is a very dangerous development which we shall resist.
The hon. Member for Epping (Mr. Tebbit) asked, "Why bother to establish yet another security force? We already have the police and the airports police". That is true. We would want another security force, if it is necessary—and I believe that it is—to take over the powers which are to be given to the private security organisations. That means that we wish to extend the scope of recruitment. We do not simply have to limit ourselves to recruiting police officers or people eligible for the ordinary regular police force.

Mr. Tebbit: What is the argument?

Mr. Davis: The argument is this: we believe that this security force should be accountable to the Minister and, therefore, to the House.
I must spell out the powers once again. These people will have power under Clause 10(2)(c) to search without warrant both property and persons. They have

the power—the Minister is wrong on this issue—to stop and detain any person
for so long as may be necessary for that purpose".
That is Clause 19(2), and it is a power which can be used by a private security organisation.

Mr. Onslow: Not without a direction given by the Secretary of State. The hon. Gentleman has carelessly omitted to tell the House that.

Mr. Davis: I am talking about directions. That is what the whole debate is about. Both here and in Committee, such is his attitude, the hon. Gentleman will not listen. We are talking about directions.

Mr. Tebbit: The hon. Gentleman says that the right of search—he calls it a right, but it is not, as has been clearly laid down—should not be given to the employees of private companies. Does he think that employees of an airline should be allowed the right of search, if a passenger agrees to it? How are they accountable to the House?

Mr. Davis: I want to see a proper security organisation doing this job. [HON. MEMBERS: "Wriggling."] There is no question of wriggling. That is what we want.
The next power is power to use force quite beyond that permitted to the ordinary citizen. This is Clause 13(4),
but nothing in this subsection shall restrict the use of force (whether at the instance of such an operator or manager or otherwise) by a constable, or its use by any other person in the exercise of a power conferred by the following provisions of this Act.

Mr. Onslow: Before the hon. Gentleman gets too excited about that, I am glad to be able to tell him that we intend to accept the amendment which he has put down on that subject.

Mr. Davis: That goes a little way, but it does not deal with the essential argument here. The hon. Gentleman did not say anything about that in his speech, and, although we are glad that he proposes to make that concession, it still does not justify the use of these private security organisations.
What is more, these people may use weapons—not guns, but they have their truncheons, as was made ineluctably clear


—this is in col. 279—by the Minister in Committee.
There is no justification for conferring these additional and excessive powers on private security organisations. It is a sinister new development, which causes them to come into confrontation with the police. It is a development which large sections of the Press have totally deplored, a fact about which the Minister cares nothing. Moreover, it is a development which the Police Federation has stated time and again it does not like.
It happened over immigration control. I do not believe that it is a job for these private security organisations to deal with sensitive issues such as immigration control. Now, we have another field in which the private security force may be involved. The Police Review, said on 31st July 1970:
the only rational solution is to hand over the job to the large regular forces.
I go along part of the way with that.
The private security firms are not properly equipped to perform these additional tasks. The Government have no knowledge of the training which is provided for them; that is totally in the hands of the private security organisation, as has been admitted by the Home Office. There is no supervision over selection. We have no idea of the qualifications of the people involved. We have no absolute assurance as to their integrity. Yet they are to undertake important duties not only of search but in all the other ways to which I have alluded.
There is, moreover, a serious risk of confusion between the police and some of the security organisations. A number of special constables have written to me complaining that, whereas the regular police force was able to adapt its uniforms clearly so as to avoid that misunderstanding and confusion, they have not been permitted to do so, and they feel—they are a pretty authoritative body—that there is a genuine risk of confusion between them and the private security organisations. The Minister pours scorn on that, but he is in splendid isolation. Representations have been made to us by various bodies and the Minister has failed totally to take heed of those representations.

10.15 p.m.

The question of answerability is very important. We have already discussed the fact that there is to be no parliamentary accountability for the operation of the Bill. But it involves more than that. There is no proper complaints machinery available in regard to abuses of authority by these private security armies. It is not simply a question of their committing torts which are actionable. There is no complaints procedure to deal with cases of incivility by an employee of a private security firm in respect of an ordinary member of the public. These matters could be dealt with if we were given such a security force.

We have no knowledge of the cost involved because there is no direcet relationship between the Government and the security firms. Anybody who believes that the cost of employing them will not be passed on to the public is grotesquely naive. And even if they were to be directly employed by the Government, that information would be hidden from us.

Mr. Robert Adley: rose——

Mr. Davis: I must get on. I do not believe that these private security organisations are completely above suspicion, as the Minister suggests. They are not licensed, there is no control over them, there is no supervision, and their members do not have to be members of trade unions. [Laughter.] Obviously. the Government benches find this most amusing. We say that a separate security organisation involved with the police would be the best way to deal with these problems. Recruitment and training would be under the control of the Secretary of State, and the force would be able to work more closely with the regular police. It would attract people who are now perhaps being attracted by Securicor and other firms, and this would provide healthy competition. Furthermore, we should be able to ask questions in the House about how the force was operating, and this, again, is a matter of vast importance.
I must deal with the arguments which have been deployed by the Minister against the use of a new addition to our security forces. We have heard the


argument about "peakiness" and the fact that there is not a consistent requirement for security people. The police face similar problems and there is a problem of "peakiness" in regard to the scale of crime. These things do not happen only in the summer or at weekends since police have to be available to deal with any situation. What is the difference in principle? Even if the Minister were right and it were more costly to have such a force, I still believe that these powers should not be given to a private security organisation, but that they should be invested in a State organisation.
The Minister then said, "What is the row all about?" His attitude was, "I shall be invoking these powers only rarely and they may be only a minor extension of the present situation." But it must be pointed out that he is seeking this untrammelled power to deal with the situation referred to in the Bill and, on his own admission, this is no minor extension.
We are anxious about the role of private security organisations. We do not believe that this extension of power should be given to them. We do not believe that there should be this inability to control these forces properly, and we

deplore the increasing dependence of the Government on private security organisations. The New Law Journal said:
Security firms have become big business and have established an immunity which is incompatible with the rights of the individual It is time they were cut down to size.

I believe that to be absolutely right.

I refer the Minister to a speech made in 1967 by his hon. Friend who is now Minister of Aerospace and Shipping. He said about a Bill then before the House:
We will not lightly hand over to a Minister powers that are imprecise and not fully understood, and about which the hon. Member will not tell us. That is not the purpose of the House of Commons."—[OFFICIAL REPORT, 28th April, 1967; Vol. 763, c. 2018.]

The powers which are to be invested in these other persons in these private security organisations are imprecise, they are not fully understood, and the hon. Gentleman has not explained them. Therefore I do not believe that it is the purpose of the House of Commons to pass this imprecise legislation.

Question put, That the clause be read a Second time:—

The House divided: Ayes 137, Noes, 150.

Division No. 198.]
AYES
[10.21 p.m.


Archer, Peter (Rowley Regis)
Fernyhough, Rt. Hn. E.
Mackenzie, Grego


Atkinson, Norman
Fletcher, Ted (Darlington)
Mackie, John


Barnett, Guy (Greenwich)
Foot, Michael
Maclennan, Robert


Baxter, William
Fraser, John (Norwood)
McNamara, J. Kevin


Benn, Rt. Hn. Anthony Wedgwood
Galpern, Sir Myer
Mallalieu, J. P. W. Huddersfield, E.)


Bishop, E. S.
Ginsburg, David (Dewsbury)
Marks, Kenneth


Blenkinsop, Arthur
Golding, John
Marquand, David


Booth, Albert
Gourlay, Harry
Marsden, F.


Bottomley, Rt. Hn. Arthur
Grant, George (Morpeth)
Marshall, Dr. Edmund


Broughton, Sir Alfred
Hamling, William
Mason, Rt. Hn. Roy


Buchan, Norman
Hardy, Peter
Meacher, Michael


Buchanan, Richard (G'gow, Sp'burn)
Harrison, Walter (Wakefield)
Mellish, Rt. Hn. Robert


Campbell, I. (Dunbartonshire, W.)
Hatton, F.
Mendelson, John


Carmichael, Neil
Heifer, Eric S.
Millan, Bruce


Carter-Jones, Lewis (Eccles)
Hughes, Mark (Durham)
Milne, Edward


Castle, Rt. Hn. Barbara
Hunter, Adam
Morgan, Elystan (Cardiganshire)


Clark, David (Colne Valley)
John, Brynmor
Morris, Alfred (Wythenshawe)


Cohen, Stanley
Johnson, James (K'ston-on-Hull, W.)
Morris, Charles R. (Openshaw)


Coleman, Donald
Johnson, Walter (Derby, S.)
Murray, Ronald King


Concannon, J. D.
Jones, Barry (Flint, E.)
Oakes, Gordon


Conlan, Bernard
Jones, Dan (Burnley)
O'Malley, Brian


Cox, Thomas (Wandsworth, C.)
Jones, T. Alec (Rhondda, W.)
Orbach, Maurice


Davidson, Arthur
Judd, Frank
Oswald, Thomas


Davies, G. Elfed (Rhondda, E.)
Kaufman, Gerald
Paget, R. T.


Davis, Clinton (Hackney, C.)
Kerr, Russell
Palmer, Arthur


Davis, Terry (Bromsgrove)
Lambie, David
Peart, Rt. Hn. Fred


Deakins, Eric
Lamond, James
Prentice, Rt. Hn. Reg.


Delargy, Hugh
Leonard, Dick
Prescott, John


Dell, Rt. Hn. Edmund
Lester, Miss Joan
Probert, Arthur


Dempsey, James
Lewis, Arthur (W. Ram, N.)
Rhodes, Geoffrey


Doig, Peter
Lewis, Ron (Carlisle)
Richard, Ivor


Douglas-Mann, Bruce
Loughlin, Charles
Roberts, Rt. Hn. Goronwy (Caernarvon)


Dunn, James A.
Lyons, Edward (Bradford, E.)
Robertson, John (Paisley)


Edelman, Maurice
McBride, Neil
Rose Paul B.


Evans, Fred
McElhone, Frank
Short, Rt. Hn. Edward (N'c'tle-u-Tyne)


Faulds, Andrew
McGuire, Michael
Silkin, Hn. S. C. (Dulwich)



Machin, George
Silverman, Julius




Skinner, Dennis
Thorpe, Rt. Hn. Jeremy
Whitehead, Phillip


Small, William
Tinn, James
Williams, Alan (Swansea, W.)


Smith, Cyril (Rochdale)
Tuck, Raphael
Williams, Mrs. Shirley (Hitchin)


Spriggs, Leslie
Urwin, T. W.
Wilson, Rt. Hn. Harold (Huyton)


Stallard, A. W.
Varley, Eric G.
Wilson, William (Coventry, S.)


Stoddart, David (Swindon)
Wainwright, Edwin
Woof, Robert


Stott, Roger (Westhoughton)
Walker, Harold (Doncaster)



Strang, Gavin
Wellbeloved, James
TELLERS FOR THE AYES:


Summerskill, Hn. Dr. Shirley
Wells, William (Walsall, N.)
Mr. James Hamilton and


Swain, Thomas
White, James (Glasgow, Pollok)
Mr. Ernest Armstrong.




NOES


Adley, Robert
Havers, Michael
Percival, Ian


Allason, James (Hemel Hempstead)
Hawkins, Paul
Pounder, Rafton


Amery, Rt. Hn. Julian
Hiley, Joseph
Powell, Rt. Hn. J. Enoch


Archer, Jeffrey (Louth)
Holt, Miss Mary
Price, David (Eastleigh)


Astor, John
Hornby, Richard
Proudfoot, Wilfred


Atkins, Humphrey
Hornsby-Smith, Rt. Hn. Dame Patricia
Pym, Rt. Hn. Francis


Awdry, Daniel
Howell, Ralph (Norfolk, N.)
Raison, Timothy


Benyon, W.
Hunt, John
Ramsden, Rt. Hn. James


Biffen, John
Hutchison, Michael Clark
Rawlinson, Rt. Hn. Sir Peter


Biggs-Davison, John
Iremonger, T. L.
Redmond, Robert


Blaker, Peter
James, David
Reed, Laurance (Bolton, E.)


Boscawen, Hn. Robert
Jessel, Toby
Rees-Davies, W. R.


Bowden, Andrew
Jopling, Michael
Renton, Rt. Hn. Sir David


Braine, Sir Bernard
Kershaw, Anthony
Roberts, Wyn (Conway)


Brinton, Sir Tatton
Kimball, Marcus
Rossi, Hugh (Hornsey)


Brocklebank-Fowler, Christopher
King, Evelyn (Dorset, S.)
Rost, Peter


Brown, Sir Edward (Bath)
King, Tom (Bridgwater)
Sandys, Rt. Hn. D.


Bryan, Sir Paul
Kinsey, J. R.
Scott-Hopkins, James


Buchanan-Smith, Alick (Angus, N & M)
Kirk, Peter
Shaw, Michael (Sc'b'gh & Whitby)


Burden, F. A.
Knight, Mrs. Jill
Shelton, William (Clapham)


Butler, Adam (Bosworth)
Knox, David
Soref, Harold


Carlisle, Mark
Lane, David
Speed, Keith


Chapman, Sydney
Longden, Sir Gilbert
Spence, John


Churchill, W. S.
Luce, R. N.
Stainton, Keith


Clarke, Kenneth (Rushcliffe)
MacArthur, Ian
Stanbrook, Ivor


Clegg, Walter
McLaren, Martin
Stewart-Smith, Geoffrey (Belper)


Cooke, Robert
McNair-Wilson, Michael
Stodart, Anthony (Edinburgh, W.)


Coombs, Derek
Maddan, Martin
Stuttaford, Dr. Tom


Corfield, Rt. Hn. Sir Frederick
Madel, David
Sutcliffe, John


Crouch, David
Mather, Carol
Taylor, Edward M. (G'gow, Cathcart)


Crowder, F. P.
Maxwell-Hyslop, R. J.
Taylor, Frank (Moss Side)


Davies, Rt. Hn. John (Knutsford)
Meyer, Sir Anthony
Tebbit, Norman


d'Avigdor-Goldsmid, Maj.-Gen. Jack
Miscampbell, Norman
Thompson, Sir Richard (Croydon, S.)


Deedes, Rt. Hn. W. F.
Mitchell, David (Basingstoke)
Turton, Rt. Hn. Sir Robin


Dykes, Hugh
Moate, Roger
Vaughan, Dr. Gerard


Eyre, Reginald
Money, Ernie
Vickers, Dame Joan


Fenner, Mrs. Peggy
Monks, Mrs. Connie
Waddington, David


Fisher, Nigel (Surbiton)
Monro, Hector
Ward, Dame Irene


Fowler, Norman
More, Jasper
Warren, Kenneth


Fox, Marcus
Morgan, Geraint (Denbigh)
Weatherill, Bernard


Gower, Raymond
Mudd, David
Wilkinson, John


Grant, Anthony (Harrow, C.)
Murton, Oscar
Winterton, Nicholas


Green, Alan
Nabarro, Sir Gerald
Wood, Rt. Hn. Richard


Grieve, Percy
Noble, Rt. Hn. Michael
Woodhouse, Hn. Christopher


Grylls, Michael
Normanton, Tom
Woodnutt, Mark


Gummer, J. Selwyn
Onslow, Cranley
Worsley, Marcus


Hall, John (Wycombe)
Osborn, John
Younger, Hn. George


Hall-Davis, A. G. F.
Owen, Idris (Stockport, N.)



Hamilton, Michael (Salisbury)
Page, Rt. Hn. Graham (Crosby)
TELLERS FOR THE NOES:


Harrison, Col. Sir Harwood (Eye)
Page, John (Harrow, W.)
Mr. Tim Fortescue and


Haselhurst, Alan
Parkinson, Cecil
Mr. Hamish Gray.



Peel, John

Question accordingly negatived.

New Clause 5

PROCEEDINGS FOR EXTRADITION

'Where the crime, in respect of which surrender of a fugitive offender is sought pursuant to the Extradition Acts 1870 to 1935 or to the Fugitive Offenders Act 1967 or under this Act, is an offence under this Act, the order of the Secretary of State relating to such proceedings may be addressed to any stipendiary magistrate in England or Northern Ireland or to any sheriff or sheriff-substitute in Scotland'.—[Mr. Clinton Davis.]

Brought up, and read the First time.

Mr. Clinton Davis: I beg to move, That the clause be read a second time.
This is a probing amendment. Where a crime, in respect of which the surrender of a fugitive criminal is sought, is committed on board a ship on the high seas which comes into any port in the United Kingdom, the order relating to such proceedings may be addressed to any stipendiary magistrate in England or Northern Ireland or a sheriff or sheriff-substitute in Scotland. The position is not clear concerning an aircraft.
Has the stipendiary magistrate to whom the order will be addressed in England to be the chief magistrate or one of the other magistrates at Bow Street Magistrates' Court, as defined by Section 26 of the Extradition Act 1870? Or may it be dealt with in the same way as a ship on the high seas? I can see no difference of principle between a crime committed on board ship and one committed on an aircraft.

Mr. Onslow: Perhaps I can take this opportunity, briefly and in slightly more relaxed circumstances, to congratulate the hon. Member for Hackney, Central (Mr. Clinton Davis) on his elevation to that dangerous position from which he has just spoken. I hope that our remaining debates tonight will be in a greater spirit of amity and concord, and that we shall not need to fall out again—although he knows that I am always willing to oblige if he insists.
I have corresponded with the hon. Gentleman on one of these points. In a letter dated 30th May, I explained that, to the extent that the new clause was intended to apply Section 16 of the Extradition Act, 1870, to offences under the

Bill committed on board aircraft which landed in the United Kingdom, it was unnecessary. No such provision is required, in view of Section 2(1) of the Tokyo Convention Act, the provisions of which I dare say the hon. Member is sufficiently familiar with for me not to need to rehearse them.

Mr. Clinton Davis: Perhaps the Minister would do so, briefly.

Mr. Onslow: The hon. Gentleman always accuses me of reading quickly, but in response to his invitation, I would say that the Act says:
For the purposes of the application of the Extradition Act 1870 to crime committed on board an aircraft in flight … paragraphs (1) to (3) of section 16 of that Act (which have effect where a person's surrender is sought in respect of a crime committed on board a vessel on the high seas which comes into any port of the United Kingdom) shall have effect also where a person's surrender is sought in respect of a crime committed on board an aircraft in flight which lands in the United Kingdom….
I hope that that meets the hon. Gentleman's point, and that he is not seeking information on any other point. If he is, I am briefed on that too, but on the assumption that he is not, I give him that as the answer.

Mr. Clinton Davis: In the light of that assurance, I beg to ask leave to withdraw the motion.

Motion and clause, by leave, withdrawn.

Clause 2

OTHER ACTS ENDANGERING OR LIKELY TO ENDANGER SAFETY OF AIRCRAFT

Mr. Onslow: I beg to move, Amendment No. 3, in page 3, line 22, leave out subsection (3) and insert:
'(3) It shall also, subject to subsections (3A) and (4) of this section, be an offence for any person intentionally to communicate any information which is false, misleading or deceptive in a material particular, where the communication of the information endangers the safety of an aircraft in flight or is likely to endanger the safety of aircraft in flight.
(3A) It shall be a defence for a person charged with an offence under subsection (3) of this section to prove—

(a) that he believed, and had reasonable grounds for believing, that the information was true, or


(b) that, when he communicated the information, he was lawfully employed to perform duties which consisted of or included the communication of information and that he communicated the information in good faith in the performance of those duties'.

Mr. Deputy Speaker (Miss Harvie Anderson): With this amendment it will be convenient to discuss Amendment No. 4, in page 3, line 24, leave out 'false' and insert:
'misleading, false or deceptive in any material particular'.

Mr. Onslow: The purpose of this amendment is to replace subsection (3) of Clause 2 of the Bill first by a provision which makes it an offence intentionally to communicate information which is false, misleading or deceptive in a material particular, where the communication of that information endangers the safety of an aircraft in flight or is likely to endanger the safety of aircraft in flight.
The hon. Member for Burnley (Mr. Dan Jones) raised this point quite fairly in Committee and we spent a little time on it.
In so far as the amendment includes information which is misleading or deceptive, it would extend subsection (3) which as it now stands relates only to information which the giver knows to be false or which he has not reason to believe to be true. We have considered, and are satisfied, that to include misleading and deceptive information would not in fact bring us out of line with Article 1.1 e of the Montreal Convention. It is, we think, legitimate to interpret "false" in the context of that article as including information which is misleading or deceptive. I am indebted to the hon. Member for Hackney, Central (Mr. Clinton Davis) for suggesting in Committee that the clause should be extended in this way.
Secondly, the amendment would specify the defences open to a person charged with communicating information which is false, misleading or deceptive. It would be a defence for him to prove that he believed, and had reasonable grounds for believing, that the information was true. This means that, for example, any person who had reason to believe that there was a bomb on board an aircraft, though in fact there was not, would not be guilty

of an offence if he acted as a good citizen and communicated this information.
I hope that I need not expand further on this point and that the amendment will commend itself to the House.

Mr. Bishop: I am pleased that the Government have moved the amendment. This matter was raised in Committee by my hon. Friend the Member for Hackney, Central (Mr. Clinton Davis). It lines up with the Montreal Convention and with the wording of Section 19(1) of the Theft Act, which is appropriate. It is also a very concise wording and, more important, it protects the person who is the lawful instrument in communicating the information.
On the basis of the Minister's comment and the acceptance of our suggestion in Committee there is no need to move Amendment No. 4.

Amendment agreed to.

Clause 11

GENERAL POWER TO DIRECT MEASURES TO BE TAKEN FOR PURPOSES TO WHICH PART II APPLIES

Mr. Onslow: I beg to move, Amendment No. 13, in page 11, line 16, leave out from 'property' to 'and' in line 17.

Mr. Deputy Speaker: With this amendment it will be convenient to discuss Government Amendment No. 14.

Mr. Onslow: Those hon. Members who served on the Committee may remember that the prose style of this passage in the original Bill attracted unfavourable comment. An undertaking was given that we would see what we could do about it. Modesty forbids me from identifying the anonymous draftsman, but the House will see that it has proved possible to rephrase these provisions without destroying their sense and to save 36 words in the process.
I hope that the amendments will commend themselves to the House.

Mr. Clinton Davis: I congratulate the hon. Gentleman—a very unusual situation—on getting rid of some of the gobbledegook which appeared in the Bill, which he conceded.

Amendment agreed to.

Amendment made: No. 14, in page 11, line 18, leave out from 'require' to end of line 26 and insert:
'the modification or alteration of any aircraft, or of any of its apparatus or equipment, or the installation of additional apparatus or equipment, or prohibit any aircraft from being caused or permitted to fly without some modification or alteration of the aircraft or its apparatus or equipment or the installation of additional apparatus or equipment'.

Clause 12

MATTERS WHICH MAY BE INCLUDED IN DIRECTIONS UNDER SS. 9 TO 11

Mr. Clinton Davis: I beg to move, Amendment No. 15, in page 12, line 12, after first 'the', insert 'minimum'.
I hope that the amendment is acceptable to the Government.

Mr. Onslow: The amendment is acceptable, as we indicated in Committee, now that the Opposition have got the wording right.

Amendment agreed to.

Clause 13

LIMITATIONS ON SCOPE OF DIRECTIONS UNDER SS. 9 TO 11

Mr. Bishop: I beg to move Amendment No. 16, in page 13, line 8, leave out 'force' and insert:
'such force as is reasonable in the circumstances'.
We raised this matter in Committee on the Question, "That the clause stand part of the Bill". The clause says:
… to do anything which, apart from the direction, would constitute an act of violence; but nothing in this subsection shall restrict the use of force
by various named persons
in the exercise of a power conferred …
These are very wide powers. We believe there are occasions when force will be necessary, but it is essential, especially in view of our misgivings about the employment of security forces, that there should be no more force than is reasonable.

Mr. Onslow: As I indicated earlier, this is an amendment which we are happy to accept. This shows that, contrary to the charges levelled by the hon. Member

earlier, the Government are no less jealous of the civil liberties in this country than are the Opposition. On that basis, I am happy to accept the amendment.

Amendment agreed to.

Clause 14

SPECIAL PROVISIONS AS TO CERTAIN DIRECTIONS UNDER S. 11

Mr. Bishop: I beg to move Amendment No. 19, in page 14, line 18, after 'objection' insert:
'at a private hearing, if such is requested by such person, at which such person may be legally represented'.

Mr. Deputy Speaker: With this amendment we are to take Government amendment No. 20 and amendment No. 21.

Mr. Bishop: We are pleased that the Minister has seen fit to come some way towards us. The clause provides that 30 days be allowed for representations to be made to the Secretary of State about directions under Section 11 and not specified as urgent and relating to the
construction, execution, alteration, demolition or removal of a building or other works".
The amendment would require the Secretary of State to give an opportunity for legal representation at a private hearing and also to state in writing his reasons for any decision arrived at.
Although we welcome the Minister's amendment, which means that, instead of the Secretary of State as heretofore appearing as judge and jury, there is the possibility of an appearance before another person appointed by the Secretary of State, we wonder if the Under-Secretary will clarify the situation as to whether there shall be legal representation in those circumstances.
In Amendment No. 21 we urge that the Minister shall give in writing the reasons for his decision, save that he shall not be obliged to give details which may involve questions of national security.

Mr. Onslow: I must advise the House to resist Amendment No. 19. I am in a slight procedural difficulty, Mr. Deputy Speaker, which I hope you will help me with. I am anxious to prevail upon the House to accept Government Amendment No. 20. I am not clear whether


that requires that Amendment No. 19 should be voted down or whether it could be withdrawn. Perhaps either is equally good. In any case, I rely upon guidance from the Chair to ensure that the Government amendment is not lost.
The hon. Member for Newark (Mr. Bishop) and the Government are on to a similar point. I hope that I can persuade the hon. Gentleman that we are closer to it than he is. In Committee we undertook to look further at proposals which hon. Members opposite put forward and which are now reflected in Amendment No. 19 that a person objecting to a non-urgent direction under Clause 11 relating to buildings and works should have the opportunity to state his objection at a hearing at which, if he wished, he might be legally represented.
The Government accept these proposals in principle, subject to three points. First, we cannot agree that the objections should be heard in public. I think that hon. Members opposite take this point by their reference to "a private hearing" in Amendment No. 19.
Secondly, "hearing" carries an implication of formality which we believe is unnecessary and should be avoided.
Thirdly, it is inappropriate to refer in the Bill to legal representation, though we would be perfectly content for a person making an objection to be accompanied by or be represented by his legal adviser when his objection is being heard.
Amendment No. 20, which represents the Government's response to the Opposition's proposal, is a common form provision for which there are many precedents on the statute book; for example, Section 39 of the Town and Country Planning Act 1971, Section 29 of the Agriculture Act 1970 and others which I could cite but will forbear to do so.

10.45 p.m.

Given that this is so, and given that it would be regrettable to insert in the Bill anything at variance with the established practice in this matter, since it might cast doubt on these provisions——

Mr. Clinton Davis: Perhaps we have all slipped up in the hon. Gentleman's amendment. It does not refer to the question of a private hearing. I suppose

that it might be argued by somebody appearing before the person appointed by the Secretary of State that the hearing should be public. Therefore, I wonder whether the hon. Gentleman could give some thought to the possibility of an amendment being moved in another place to make that essential provision clear in the Bill.

Mr. Onslow: I do not know whether it is necessary to insert a specific stipulation to this point. It would be open to another place to amend our amendment and presumably return it to us for final approval. I will see that the hon. Gentleman's point is looked at, but I cannot offhand give him an answer.
I hope that without going any further I can persuade the hon. Gentleman that Amendment No. 20 covers, as far as possible, the purposes of Amendments 19 and 21 which, as I say, I cannot recommend to the House but I hope to carry the House with me on Amendment 20.

Mr. Bishop: It might help the House procedurally if I were to seek leave to withdraw Amendment 19 and not to press Amendment 21. I therefore beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendment made: No. 20, in page 14, line 18, leave out shall 'serve on him' and insert
'if so required by the to him an opportunity objector, shall afford of appearing before, and being heard by, a person appointed by and being heard by, a for the purpose, and the Secretary of State the objector'.—[Mr. Onslow.]

Clause 20

PENALTIES IN CONNECTION WITH EXERCISE OF POWERS UNDER PART II OR UNDER

S. 19

Mr. Onslow: I beg leave to move Amendment No. 26, in page 21, line 7, leave out from Act 'to 'to' in line 13 and insert:
'shall be liable—

(a) on summary conviction, to a fine not exceeding £400 or to imprisonment for a term not exceeding three months or to both;
(b) on conviction on indictment, to a fine or to imprisonment for a term not exceeding five years or to both.



(7) A person found guilty of an offence under this section shall be liable—

(a) on summary conviction, to a fine not exceeding £400;
(b) on conviction on indictment'.

Mr. Deputy Speaker (Miss Harvie Anderson): With this amendment we can take the following:

Amendment No. 27, in page 21, line 8, after '£400', insert:
'or to imprisonment for a term not exceeding six months or to both'.

Amendment No. 28, in page 21, line 14, leave out 'two' and insert 'five'.

Mr. Onslow: The purpose of this amendment is to modify the existing penalties under Clause 20 relating to offences under Clause 16 to provide that a person guilty of an offence under Clause 16 shall be liable on summary conviction, as an alternative to a fine not exceeding £400, to imprisonment for a term not exceeding three months or both.
Following the discussion in Committee, we have again considered carefully the penalties for offences under Parts II and III of the Bill. Our approach to this involves two closely related considerations: first, that the offences under Clause 16 which may include unlawful possession of firearms or explosives are more serious than offences under Clause 20 which are largely regulatory offences. It is the Government's duty to ensure that the maximum penalties which the courts may impose in respect of different offences reflect the comparative seriousness of those offences. Secondly, it is necessary to make sure that similar offences in different fields of legislation are not made punishable by widely differing maximum penalties.
I hope I carry the hon. Member for Hackney, Central (Mr. Clinton Davis) with me in that, bearing these considerations in mind and the views expressed in Committee, the Government accept in principle that a penalty of imprisonment may be made available on summary conviction of an offence under Clause 16. However, we do not consider that this should extend to offences under Clause 20 because we do not believe that the seriousness of offences under that clause merits such a penalty. It is the policy of the Government to try to get away, wherever possible, from the provision of short

sentences of imprisonment on summary conviction.
In general, under Section 25 of the Magistrates' Courts Act 1952, anyone charged before a magistrates' court with an offence punishable on summary conviction by more than three months' imprisonment has the right to claim trial by jury. If, therefore, we want to be sure that cases can be tried by magistrates and that imprisonment is available on summary conviction, which I think was the hon. Member's intention, then it would be appropriate to restrict the term of imprisonment to a maximum of three months rather than six months.
It is for these reasons that the amendment in my name is confined, on the one hand, to offences only under Clause 16 and, on the other, to a term of imprisonment not exceeding three months. Hon. Members will recall that all the offences under Clauses 16 and 20 are hybrid offences—that is, offences which may be tried either summarily or on indictment—and that substantial sentences of imprisonment are, of course, available on conviction on indictment.
I hope that in the light of what I have said the Opposition will agree that we have made a constructive response to their proposals, and that the Bill can be amended accordingly.

Mr. Clinton Davis: The Minister has been partially constructive. Perhaps if the Solicitor-General had been here he would have been wholly constructive, and we are sorry that he is not. As drafted the Bill represented an obvious lacuna which has now been partially cured. On summary conviction previously there was no provision for imprisonment for offences under Clause 16. That was an absurd situation. The court would have had the power only to fine. Now there is to be a maximum term of three months' imprisonment.
We would have preferred that to have been six months, which would have been more fitting for an offence of this character. It would also have given the right of election for trial to the accused, which we would have preferred. The right of election has been retained for the prosecution, because the Crown can proceed to indictment, which must be dealt with in a higher court.
For offences under Clause 20 the Government have still chosen not to go for a term of imprisonment on summary conviction, and I challenged the Minister in committee, and I repeat that challenge now, to say where else in our statutes for a serious criminal offence—and the seriousness of these offences should not be minimised—only a fine is imposed on summary conviction. The point that the Minister made that he did not want there to be substantial penalties of imprisonment for offences of this character was an argument he put forward for Clause 16 previously. He is therefore now in the completely illogical position of making a concession on that clause. He said that the Government had set their face against short terms of imprisonment, but that is not the case with Clause 16.
The fact that the prosecution has the right to elect for trial on Clause 20 is not germane. The real danger is that the prosecution might fel that simply because there is no penalty of imprisonment available for a Clause 20 offence they are obligated to proceed to trial. That could involve unnecessary expense and delay and I would have preferred some short period of imprisonment, albeit not more than three months, to have been included for an offence under Clause 20.
I know that the Minister has set his face against it until now, but will he consider the matter further so that it can be dealt with once again in the House of Lords, because it is wholly unusual that no penalty of imprisonment should be imposed for a summary offence of this character and it is something I have not come across before.
I may be wrong but I should like to hear the Minister make some even more constructive proposal.

Mr. Onslow: I rise only to disappoint the hon. Gentleman. I fear that I cannot make a response that he would regard as more constructive. I had hoped that an advance of 50 per cent. of the way towards his position might have satisfied him. I am sorry that it has not. However, I fear I cannot move any further.

Amendment agreed to.

Clause 27

SHORT TITLE AND COMMENCEMENT

Mr. Onslow: I beg to move Amendment No. 31, in page 26, line 19, leave out 'section 6(2)' and insert:
'the provisions specified in the next following subsection, shall come into force on the passing of this Act.
(3) Sections 1 to 5 and subsections (1) and (3) of section 6 of this Act.'
The purpose of the amendment is to ensure that there should be no delay when the Bill has been enacted in bringing into force Clause 6(2), and particularly Parts II and III.
After passing the Act there are certain formalities to be completed and complied with before the processes of ratifying the Montreal Convention can be completed. These will take time, and it is therefore desirable that the Bill, as it relates to the Montreal Convention, shall come into force on such day as Her Majesty may by Order in Council appoint. However, it would not be appropriate to delay the coming into force of the rest of the Act on this account.

Amendment agreed to.

Schedule

PROVISIONS RELATING TO COMPENSATION

Mr. Bishop: I beg to move Amendment No. 32, in page 27, line 12, leave out 'twelve months', and insert 'two years'.
The amendment refers to the schedule and the provisions relating to compensation. It gives a very limited period during which claims for compensation may be made.
In Committee, the Minister will recall that my hon. Friends and I tabled an amendment to extend the period from 12 months, which we thought was rather short for the preparation of all the legal aspects dealing with the making of claims, to three years. We thank the Minister for the letters that he has sent to us on this matter since Committee stage, but we feel that 12 months is a very short period.
In Committee, my hon. Friend the Member for Hackney, Central (Mr. Clinton Davis) asked whether it would be necessary only for a general notice to be given of intention to claim compensation within 12 months or whether a more specific claim should be made. In the latter case 12 months seems a short period. On second thoughts, having moved earlier that the period should be extended to three years, we feel that two years might be a compromise that the Minister can accept. We feel that if the period of notice of a claim for compensation is left at 12 months problems could be created which it would be difficult to overcome. We hope that the Minister will reply in the affirmative.

Mr. Onslow: The hon. Gentleman will, I hope, be glad and not too amazed to know that for once I find his advocacy as irrestible as it was brief. In Committee I threw out a hint that we might accept such an amendment. I am glad that the Opposition have taken the hint. I am happy that we can meet half way.

Amendment agreed to.

Bill read the Third Time and passed, with amendments.

PAKISTAN BILL

As amended (in the Standing Committee), considered.

Clause 3

TEMPORARY SAVING FROM DISABILITY

10.58 p.m.

The Under-Secretary of State for the Home Department (Mr. David Lane): I beg to move Amendment No. 1, in page 2, line 8, leave out 'six' and insert 'twelve'.

Mr. Deputy Speaker (Miss Harvie Anderson): With this amendment it will be convenient to take Amendment No. 2.

Mr. Lane: These amendments, which go together, fulfil an undertaking that I gave in Committee. Hon. Members will recall that the Committee accepted Government amendments which had the effect of extending from six months to 12

months the period of grace within which applications might be made after the coming into force of the Act or after completing the qualifying period of ordinary residence in certain cases.
At that time I promised that an amendment would be put down to Clause 3, which had by then been approved by the Committee, which would similarly extend the period during which a person holding an office which may not be held by an alien shall be protected from loss of office.
We have had in mind mainly the position of Pakistanis in the Civil Service and in other forms of Government employment. I agree that if at the end of the period of protection the application for registration made by the person concerned had not been finally settled the protection would be extended until a decision had been reached. The amendments put into effect the undertakings which the Government made.

11.0 p.m.

Mr. John Fraser: In Committee we asked in many amendments that there should be a period of two-years' grace. We have not tabled an amendment again to that effect. If we had done so it would not have been selected because the matter had been debated fully in Committee. I still believe that two years would have been better than one year. However, that argument has gone by the board. I am made happier because Amendment No. 26, which we shall come to later, gives the Secretary of State power to extend the grace period beyond one year for an indefinite period in circumstances which he thinks appropriate.
I am happy to say that we have reached unanimity not only on ideas but on drafting.

Amendment agreed to.

Amendment made: No. 2, in page 2, line 33, at end insert:
'(3) If, at the expiration of the period of twelve months mentioned in subsection (1) above, the said person is awaiting determination of an application by him for registration as a citizen of the United Kingdom and Colonies, that subsection shall apply as if for the period of twelve months specified therein there were substituted a period expiring on


the determination of his application.'.—[Mr. Lane.]

Mr. Lane: I beg to move Amendment No. 3, in page 2, line 35, leave out from second be 'to until' in line 40 and insert:
'precluded from remaining a member of a local authority'.

Mr. Deputy Speaker (Miss Harvie Anderson): With this amendment it will be convenient to discuss the following amendments: No. 4, in page 2, line 37, leave out 'held before 16th February 1974' and insert:
'provided that his application for registration as a citizen of the United Kingdom and Colonies has been received under the terms and within the period laid down in Schedule 2(2) of this Act'.
No. 5, in page 2, line 37, after '1974', insert:
'nor shall he be under a legal incapacity to have his name entered upon the register of electors or to vote in parliamentary or local government elections held before 16th February 1975 if, on the 10th October 1973, he is awaiting determination of an application by him for registration as a citizen of the United Kingdom and Colonies'.
No. 6, in page 2, line 37, after '1974', insert:
'neither shall he be under a legal incapacity to have his name entered upon the register of electors if on the 10th October 1973 he is awaiting determination of an application by him for registration as a citizen of the United Kingdom and Colonies nor to vote in a Parliamentary or local government election held before 16th February 1975 provided that his application for registration as a citizen of the United Kingdom and Colonies is approved by the 16th December 1973'.
And Government Amendment No. 7.

Mr. Lane: The House will know that Amendment No. 3 and Amendment No. 7 are the two Government amendments which we are recommending the House to accept. We promised in Committee that we would consider carefully the points raised about voting rights. It is mainly the rights of eligibility to register to vote which are involved in this group of amendments, although one or two other tidying-up points are covered as well.
We undertook to see whether we could put down a suitable amendment on Report which we could commend to the House in spite of the complications involved. The outcome of the consideration which we have given to the matter, in

the light of what was said during Second Reading and in Committee from both sides of the House, is Amendment No. 3 and Amendment No. 7. I note that the Opposition have tabled an amendment which is similar in approach to the Government's amendment.
Amendment No. 3 to Clause 3(3) leaves out the saving about people on the current electoral register, which reappears as our new subsection (4)(a) of Clause 3. Thus Clause 3(3) as amended will deal only with the saving for members of local authorities.
Amendment No. 7 will add two new subsections—namely, subsections 4 and 5—to Clause 3. As I have explained, the new subsection (4)(a) repeats the saving for those on the current electoral register. That is the one which will be in force until February, 1974. The way in which the saving is expressed is somewhat different and is in line with the explanation which I shall give on the new area which the amendment covers. The effect is the same.
The substantive new provision is that the new subsection (4)(b) provides that a citizen of Pakistan who ceases to be a British subject on the commencement of the Act shall nevertheless be treated as a British subject at any election for which the 1974 register is used if he is awaiting determination of an application for his registration as a citizen of this country and if, in those cases where it is required, he has the qualification of five years' ordinary residence in this country.
I must explain the provisions in slightly more detail as they are important provisions. First, I shall deal with the qualifying date. The opening words of new subsection (4)(b) are taken from Section 1 of the Electoral Registers Act 1953. They cover the qualifying dates for both Great Britain, which is 10th October, and Northern Ireland, which is 15th September. As far as Great Britain is concerned, the words simply mean if, on 10th October 1973,
he is awaiting determination of an application for his registration as a citizen …".
This covers the case not only of those who apply themselves, but also of those who have an application made for them—for example, young people almost at the age of 18 who are still technically dependent children but are old enough,


as children of that age who have been born in this country are, to be on the electoral register and in due course to vote.
To be entitled to have his name on next year's electoral register—the one to be drawn up next autumn—a citizen of Pakistan must not only be awaiting the result of an application for citizenship but must also have the five years' residence qualification where the application is made under Section 5A or 6(1) of the British Nationality Act. That qualification is not needed where the application is made under Section 6(2)—that is, wives of citizens of this country—or under Section 7—that is, children under 18 3f citizens of this country.
I should like to say a final word of explanation about the last words of subsection (4)(b). Those Pakistanis I have mentioned are to be treated as British subjects for the purposes of any election at which a register of electors published in 1974 is used. This is simply to cover the case where the register published in February 1974 continues in force for a few days beyond 16th February 1975, when it is due to be replaced, because, for example, of a printing delay or a strike.

Mr. Gerald Kaufman: I suppose that I am not alone in not being entirely clear about the complexities of the very complicated way in which the hon. Gentleman has found it necessary to bring in the amendment, for which we are duly grateful. I am in no way cavilling—I simply want to be clear. As I read the amendment—and I think that I was wrong in the way I read it—I assumed that a person would be eligible to vote during the currency of the next electoral register providing that, by polling day in whatever election was taking place, his application had gone in. Am I wrong in that? Does his application require to be in by 10th October this year?

Mr. Lane: That position is the latter. The application has to be in, although not necessarily settled—this is the key point—by 10th October next. Once that is so, and if he is satisfied that he is qualified to have applied, then the person is entitled to go on the register which will then be in force from February 1974

until, normally, the middle of February 1975, although conceivably a few days longer if there is some hold-up in the next new register coming in.
The new subsection (5) which we seek to add to Clause 3 is an important extra safeguard. This gives an electoral registration officer power to require a statutory declaration as to application for citizenship, or as to the five years' residence qualification, in just the same way as he can now require a statutory declaration as to someone being a British subject. In practice, the registration officer may not use this power very often but it will be there if he needs it either at the stage when he is compiling the electors' lists or at the stage of claims and objections.
I want now to explain simply how the provisions will work in practice from this late summer onwards.
First of all there will be a large publicity effort to explain to the Pakistani community who will be entitled to be on the next electoral register and who will not. We shall arrange this in conjunction with the Community Relations Commission, by means of leaflets, notices in papers which are read by the immigrant community, and features on radio and television. This is an important part of the exercise which we shall carry out as thoroughly as we can.
The next stage will be the canvass, when Form A is sent to householders. A Pakistani householder who knows that under the Bill he is to be treated as a British subject will complete the form as a British subject and sign the declaration that those listed are British subjects. Then the electoral registration officer, with his local knowledge and contacts with the local Community Relations Council will know broadly whether to accept the declaration. If he is in any doubt he can ask the householder or anyone in the household whether he has applied or whether in the relevant cases he has been here for the necessary five years. This applies to heads of households. If there is still doubt he can seek a statutory declaration, just as such a declaration can be sought under any objection in existing law.

Mr. Kaufman: In an attempt to make this as trouble free as possible may I ask the hon. Gentleman's Department to


consider a form of acknowledgement which could be sent out for those purposes and which a person could produce if required? This might greatly simplify matters.

Mr. Lane: The hon. Member is suggesting a form of acknowledgement from the Home Office to say that we have received an application for United Kingdom citizenship. I will consider that. We have gone into this and we do not want to complicate our own major exercise. If we have to say "No" to this that will be the reason why. I will look further into the hon. Member's suggestion. We are confident that the measures we have provided, in the amendment and in the publicity we will give, will avoid abuse or confusion.
There will be this publicity among the Pakistani community. There will also be the good sense, knowledge and skill of the electoral registration officers and there is the stage of claims and objections before the register is finally settled. Every electoral registration officer has to rely very largely on the declarations made by householders. As the law stands a false declaration at that stage can attract a fine of £50.
Clearly the vast majority of Pakistanis are as law abiding as everyone else. They want to avoid getting into difficulties with authority, whether for electoral registration or anything else. It is possible that some names may get on to the register in error. This may involve a challenge at an election, and there may be the possibility of a petition, but this is a risk which might have arisen even with the Bill in its original form or even with the Bill amended in the rather extreme way which the Opposition wanted to amend it in Committee.
This is an unavoidable part of the untidyness caused by Pakistan's decision to leave the Commonwealth. We are satisfied that we have thought out the machinery of the new provisions as thoroughly as we can.
These are important amendments and I have spoken at some length. We have considered very carefully all the arguments and I hope that hon. Members will not press Amendments Nos. 4, 5 and 6. There are good reasons why in

each case we believe that the amendments we are commending will do the job more satisfactorily. On that basis I commend them to the House.

Mr. Ivor Richard: The Under-Secretary is fulfilling the undertaking given in Committee to consider the points we made and to look at the arguments. Speaking for the Opposition I can say that it seems that on the whole the assurances he gave then have been fulfilled. By and large the provisions of Amendment No. 7 cover the majority of the difficulties that we felt were arising under the old Clause 3.

11.15 p.m.

I understand that the effect of the amendment is that a person who was a Commonwealth citizen but has ceased to be a Commonwealth citizen by virtue of Clause 1 can, nevertheless, continue to regard himself as a British subject for electoral purposes, provided he fulfils the criteria set out in the new subsection. That means that he can apply for registration before the qualifying date of 1st September this year when the Bill comes into force. There is nothing to prevent a person from submitting an application now in advance of 1st September. Provided he gets his application in now, when it comes to the compilation of the register in October, all he will have to do will be to fill in the ordinary form, complete the declaration that he is entitled to be registered as a British subject for electoral purposes, and go on next year's electoral register.

Mr. Lane: indicated assent.

Mr. Richard: I am glad to have the hon. Gentleman's confirmation, because it is important that people affected by the general provisions of the Bill should realise that they do not have to wait until 1st September 1973 before they can make their application and that they are not confined to the short period between 1st September and 10th October.
Secondly, is the Under-Secretary satisfied that sufficient forms are available at reasonably convenient places for people who might be affected by the Bill to fill in? I assume that they will technically have made the application once the form for registration has been filled in and posted or delivered. I should be grateful


for confirmation that all that people at present on the register who are worried about getting on it next year have to do is to get a registration form, fill it in, and send it off as soon as possible and then, when the ordinary form arrives in October, fill in it in the ordinary way and they will be on the register for an election in 1974. If that is the effect, we on this side of the House are grateful that the Government have conceded the justice of the case.

Mr. John Wilkinson: I, too, am grateful to my hon. Friend the Under-Secretary of State for bringing forward the amendment. I was unable to support the Government when it came before the Standing Committee, but I was equally unable to support the Opposition amendment because I felt that we had to have proposals for electoral practices which were entirely watertight. In other words, we had to be certain that those who would exercise the franchise were British subjects in the sense that they had registered as United Kingdom citizens or had the qualification to become United Kingdom citizens and whose application for registration had not been processed. In view of the existing electoral law, it would have been wrong if those who intended to remain technically aliens should have been able to exercise the franchise. I therefore much welcome the Government's amendment. It is a bit circumlocutory compared with mine, but plainly these matters must be spelled out in some detail.
I should like my hon. Friend the Under-Secretary to explain whether those whose application has not been determined by the time of compilation of the new register on 10th October must have had their application approved by 16th December, which is the termination of the verification period. I take it that that is not so, and in that sense my hon. Friend's amendment is much more generous than mine and I welcome it.
In another sense, however, it is less generous, and here I refer to paragraph (a) of the new subsection (4):
if at the commencement of this Act he is registered in a register of parliamentary electors or local government electors, shall be treated as remaining a British subject for the purposes of any election at which that register is used".

There could well be those who were entitled to be registered on the electoral register but who for some reason or other did not get on this year's register though entitled to vote at parliamentary or local government elections for the period after 15th February when the new electoral register comes into force. It seems to me that this amendment, therefore, is limiting the right to those who were previously on the electoral register. [HON. MEMBERS: "No."] I am glad to be corrected.
Of all the issues which we faced in Committee, the question of voting was the most important, apart from the question of the Azad Kashmiris. I am glad that the Government have been as generous and as wise as they have in their amendments.

Mr. Kaufman: As I was, I think, the first Member to raise this matter on Second Reading, it is right that I should acknowledge the Government's response. The hon. Member for Bradford, West (Mr. Wilkinson) said that the Government were being more generous than he was in his amendment. They are being less generous than my amendment is, but I am none the less grateful that they have responded in the spirit we asked them to show on this matter generally. It would be churlish, therefore, if I were to press my amendment, or even to move it. With one exception, we have moved, as I always hoped we should from the moment the Bill was published, towards a consensus on this matter, and, although I still prefer my amendment, I shall not take it further.
I turn now to the important matter of the availability of forms, to which my hon. and learned Friend the Member for Barons Court (Mr. Richard) referred. I imagine that the Under-Secretary will have been told by his officials already that they are a little weary of me. If they have not, they are extremely forbearing people, and I thank them for it. However, I must warn the hon. Gentleman that I do not intend to forbear from making them even more weary, if necessary, on the question of forms.
The hon. Gentleman has been extremely responsive on this matter. He has already sent to the Manchester Pakistani Welfare Bureau the quantities for which


I asked. I trust that, should the number of applications increase further—in the new circumstances, it is pretty certain to do so—the Department will accept the force of the point made by my hon. and learned Friend regarding the importance of free availability of forms to the exercise which all of us in the House have now decided should take place. I shall be glad to have an assurance about that.

Mr. Lane: I am grateful for the way in which these amendments have been received. I shall try to clear up the matters which have been raised.
The first was raised by the hon. and learned Member for Barons Court (Mr. Richard). The answer is "Yes." Anyone can and should apply now and may have applied at any time since Pakistan left the Commonwealth or since the Bill was published. There is no need to wait. The sooner that applications for registration for United Kingdom citizenship are in, the better.
The hon. and learned Gentleman and the hon. Member for Manchester, Ardwick (Mr. Kaufman) asked about the forms. I repeat the assurances that I gave in Committee. We shall do our best to keep a supply of forms available wherever they are needed. If the association to which the hon. Member for Ardwick referred runs out and likes to telephone, they will be replenished as soon as possible. We shall watch the position carefully in the weeks ahead.
The main point asked by the hon. and learned Member for Barons Court was whether it was enough simply that applicants should fill in and dispatch the registration forms. Yes. But an applicant must also be qualified. The two parts have to be read together, and that is a very important technical proviso. He must have got in his application for citizenship and he must be qualified to have made it. Once he has done that, he has taken all the steps necessary to get advantage of the continuity provision to get on the electoral register.

Mr. Richard: Where will the forms be? At which Government office will they be deposited so that people can get them and fill them in?

Mr. Lane: The main stocks are in employment exchanges all over the country. That is where applicants can go in any event. Other organisations are helping in this. But that is, so to speak, the main stream.

Mr. Raphael Tuck: The hon. Gentleman was good enough to inform me of this privately when I asked him, but can he say whether it will be possible to publicise this so that it may be generally known?

Mr. Lane: I thought that it was fairly generally known. But any more steps that we can take to publicise it, we shall take.
My hon. Friend the Member for Bradford, West (Mr. Wilkinson) asked two questions. Dealing with the first, no, it is not necessary that the application for United Kingdom citizenship should have been approved by 16th December for this electoral continuity to be enjoyed.
My hon. Friend's second question was whether the continuity was limited by the new subsection (4)(a) proposed in Amendment No. 7. This is covering a different point. It merely continues the present qualification to continuity in any election held during the currency of the 1973–74 register.
With those explanations, I hope that the House will accept the amendments.

Mr. Edward Lyons: Before the hon. Gentleman sits down, may I ask him to deal with two further points? What happens if an application is subsequently refused on the wording of this subsection? Secondly, whose is the judgment as to whether an applicant has been ordinarily resident? A form may be filled in and sent off which states that the applicant has been ordinarily resident for five years, but the Home Office may take the view that he has not. Does that invalidate his enrolment on the electoral register?

Mr. Lane: If there is any doubt about ordinary residence, that is one question which we in the Home Office shall have to settle when we are looking at an application for United Kingdom citizenship. For the purpose of getting on the electoral register, the important point is that someone who is in his view qualified for United Kingdom citizenship should


have made his application. If he fulfils that, he can fill in the electoral registration form—Canvass Form A—by the early part of October and, if he is not challenged or the electoral registration officer is satisfied, he goes on the register for the succeeding 12 months quite separately from the later processing of his application by the Home Office.

Amendment agreed to.

Amendment made: No. 7, in page 2, line 41, at end insert:
'(4) A person who by virtue of section 1(1) above ceases to be a British subject—

(a) if at the commencement of this Act he is registered in a register of parliamentary electors or local government electors, shall be treated as remaining a British subject for the purposes of any election at which that register is used;
(b) if on the qualifying date for a parliamentary or local government election held within the period of twelve months beginning with 16th February 1974—

(i) he is awaiting determination of an application for his registration as a citizen of the United Kingdom and Colonies, and
(ii) where the application was made under section 5A of the British Nationality Act 1948, or under section 6(1) thereof as modified by Schedule 1 to the Immigration Act 1971, he was, throughout the period of five years ending on the qualifying date, ordinarily resident in the United Kingdom,
shall be treated as a British subject for the purposes of any election at which a register of parliamentary electors or local government electors published in 1974 is used.

(5) The Representation of the People Regulations 1969, the Representation of the People (Northern Ireland) Regulations 1969 and the Representation of the People (Scotland) Regulations 1969 shall each have effect as if the requirements that may be made under regulation 23(1), regulation 10(1) and regulation 24(1) respectively included a requirement that a person who asserts that he is entitled to be registered by virtue of subsection (4) above should make a statutory declaration as to any fact relevant in establishing that entitlement —[Mr. Lane.]

Clause 6

CITATION INTERPRETATION, ETC.

11.30 p.m.

Mr. Lane: I beg to move Amendment No. 8, in page 3, line 32, at end insert:
'(2) For the purposes of this Act an application for registration as a citizen of the United Kingdom and Colonies shall be treated as determined when it is granted, or written notice of its refusal is given to the applicant

or another person on his behalf, or sent to him at his last-known address.'.

Mr. Deputy Speaker: With this we are to take Government amendments Nos. 18 and 22.

Mr. Lane: These are drafting amendments which we thought were desirable because of the decision, which the House has accepted, to extend the period of protection against loss of office by Amendments Nos. 1 and 2 to include the period until an application for registration is determined.
The words in Amendment No. 8 were formerly included separately in Schedules 2 and 3. Now that the date of determination of an application for registration is also to be relevant to Clause 3 we thought it best to bring these words into the main part of the Bill and to make them applicable generally, and they will still apply for the purposes of Schedules 2 and 3.

Mr. John Fraser: I accept that these are drafting amendments, but one point arises on Amendment No. 8.
An application is treated as determined when it is granted or when written notice of refusal is given to an application. Applications made under Section 5A of the British Nationality Act 1948 are decided at the discretion of the Home Secretary, although I doubt whether he will ever see an application and it will be an official who will deal with it. I should be surprised if by the time the Home Secretary has dealt with illegal immigrants and other discretionary matters he will have time to look at 90,000 application forms.
But this is a discretionery power, and I come back to the point that was made on the 1971 Act, namely, that there is no right of appeal. I hope the practice will be that if an officer at the Home Office who deals with an application has some doubt about whether he will grant or refuse it, or is considering refusing it, he will give a conditional refusal, or will raise with the applicant his reason for refusing it. He may tell the applicant that he is not satisfied that his knowledge of the English or Welsh language is adequate, or that he is not satisfied with his referees.
I hope that there will be a conditional refusal. I hope, too, that the reasons for


an impending refusal will be given so that the applicant may counter them, and only then will there be a final refusal. It would be unfortunate if the refusal were given quickly or arbitrarily without the applicant having a chance to make representations if the Home Office official had some doubt about granting the application.
I hope, therefore, that the refusal will be in two stages. First, if there is doubt about the application, I hope that the doubt will be resolved one way or another. Secondly, that refusal will be final only after the doubt has been resolved and any further representations have been received from the applicant.

Mr. Lane: What the hon. Gentleman is asking for happens already, and will continue to happen. It is not a matter of a single quick-fire refusal or a second stage one. What happens in any case of doubt now, and will continue to happen, is that we have to get further information and make checks. There is already a to-ing and fro-ing with individuals, and the same process will be adopted under the new procedure.

Mr. Edward Lyons: Will the hon. Gentleman confirm that a refusal based on the fact that five years ordinary residence has not been completed will not be a final refusal in the sense of barring a subsequent application? Assuming that a man believes he has been here for five years, whereas the Home Office takes the view that because he was away for eight months in the middle of the period he has been ordinarily resident here for three years and has another two years to wait, will he be informed on the notice of refusal why he has been refused, so that there will be a subsequent opportunity to apply?

Mr. Lane: Yes. If what is at issue is how many years he has been ordinarily resident, and if the application has to be refused because he has not been here for five years, when he has completed five years he can apply again.

Amendment agreed to.

Mr. John Fraser: I beg to move Amendment No. 9, in page 3, line 32, at end insert:
'() This Act shall come into force on such day as the Secretary of State may by order appoint'.

Mr. Deputy Speaker: With this we are to take Government Amendment No. 10, in page 3, line 36, leave out subsection (3) and insert:
'(3) This Act shall come into operation on 1st September 1973.'.

Mr. Fraser: One is happy that the Government have chosen what was urged upon them, namely, to have an appointed day. We regard it as eminently sensible to choose the first of the month so that it is that much easier to calculate periods of time. I shall in due course ask the leave of the House to withdraw my amendment and give the Government a chance to move Amendment No. 10.

The Minister of State for Foreign and Commonwealth Affairs (Mr. Julian Amery): My right hon. Friend the Member for Hertford (Lord Balniel) wished to be here but, as I think the House knows, he is in the Bahamas, where the photographs in the paper this morning gave convincing evidence that he was tied up in a tent. It might have delayed his appearance here. I hope that I shall be given indulgence if I am not as familiar as I should be with the peculiarities and the details of this very complicated measure.
I find myself once again debating with the hon. Member for Norwood (Mr. John Fraser) who faced me on many a night on the Housing Finance Bill. I am grateful to him for accepting the amendment which we have put forward, and in the circumstances I shall not delay the House beyond saying that I thank him for what he has said.

Mr. John Fraser: I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendment made: No. 10, in page 3, line 36, leave out subsection (3) and insert:
'(3) This Act shall come into operation on 1st September 1973'.—[Mr. Emery.]

Schedule 2

TRANSITIONAL PROVISIONS AS TO APPLICATIONS FOR REGISTRATION AS A CITIZEN OF THE UNITED KINGDOM AND COLONIES

Mr. Lane: I beg to move Amendment No. 11, in page 4, line 39, leave out from second 'Act' to end of line 42.

Mr. Deputy Speaker: With this amendment we are taking also Government Amendments Nos. 16 and 17.

Mr. Lane: These three amendments, taken together, are tidying-up amendments which are necessary after the deletion in Standing Committee of words in paragraph 1 of the schedule which would have restricted the entitlement to apply for registration as citizens of the United Kingdom and Colonies to people who were citizens of Pakistan on 30th January 1972, the date on which Pakistan left the Commonwealth, and to those who, having become citizens of Pakistan after that date, had applied for registration before the date on which the Bill was introduced.
We have respected the views expressed on both sides of the Committee. We accept that people who acquired citizenship of Pakistan at any time before the introduction of the Bill—largely the citizens of Jammu and Kashmir, the Azad Kashmiris—shall be entitled to apply for registration under the transitional provisions whether or not they had applied before 14th May and whether or not they had arrived in this country after Pakistan had left the Commonwealth.
All that these three amendments do in tidying up is to remove words which have become unnecessary after the changes of substance that were made in Committee, which the Government recommend the House to accept.

Amendment agreed to.

Mr. Lane: I beg to move Amendment No. 26, in page 5, leave out lines 29 to 39 and insert:


'(a) is 1st September 1974 where—

(i) the application is made under section 5A of the 1948 Act and throughout the period of five years ending with the commencement of this Act the applicant has been ordinarily resident in the United Kingdom, or engaged in relevant employ-

ment within the meaning of section 5A(3) of the 1948 Act, or partly the one and partly the other, or
(ii) the application is made under section 6(1) of the 1948 Act and at the commencement of this Act the applicant was qualified for registration under the said section 6(1), or

(b) if the application is made under the said section 5A but sub-paragraph (a)(i) above does not apply, is the earlier of the following dates, namely, 1st September 1979 and the date twelve months after the expiration of a period of five years throughout which the applicant has been ordinarily resident in the United Kingdom, or engaged in relevant employment within the meaning of section 5A(3) of the 1948 Act, or partly the one and partly the other, or
(c) if the application is made under the said section 6(1) but sub-paragraph (a)(ii) above does not apply, is the earlier of the following dates, namely 1st September 1979 and the date twelve months after the applicant becomes qualified for registration under the said section 6(1),
or such later date as the Secretary of State may in the special circumstances of any particular case allow.

Mr. Deputy Speaker: With this amendment we are taking the following amendments:
No. 14, in page 5, line 32, after 'months', insert:
'or such longer period as the Secretary of State may in the special circumstances of any particular case accept'.
No. 15, in page 5, line 33, after 'months', insert:
'or such longer period as the Secretary of State may in the special circumstances of any particular case accept'.
and Government Amendments Nos. 24 and 25.

Mr. Lane: I have a long explanation of the effect and mechanics of the amendment. I do not want to hold up the House—which has another important debate to follow on this which I know hon. Members want to reach—by speaking at great length on this amendment. Perhaps I may sum it up by saying that this package of amendments is the solution that we believe it is right to put into the Bill in place of the original words now that we have given more thought to the matter as a result of one or two queries that were raised in Standing Committee.
The effect of this package is to define more fully and clearly the dates by which


applications for registration must be made. These are complicated qualifications because, as the House knows, we have to deal with people who may be applying for registration through either Section 6(1) of the British Nationality Act 1948 or the new Section 5A of that Act.
We also have the position of Pakistanis who had been here for five years before the end of last year or who had been here for less than five years at that time. There are, therefore, different permutations and combinations of a situation of individuals who may at some point want to apply for registration as United Kingdom citizens.
It was after we looked at the word "qualified" in paragraph 2(2) which was raised by the hon. Member for Kensington, North (Mr. Douglas-Mann) that we found that the wording was not as clear as we should have liked. This is why we have rewritten the provisions completely, which among other things now include an expressed terminal date.
We have also included a power for the Secretary of State to accept an application out of time if the special circumstances of the case justify him in doing so. We had in mind here one or two of the hard cases—illness, for example, or people moving from one overseas dependent territory to another, as might arise in considering applications for citizenship. But in rewriting the provisions and setting down the dates more clearly, the special provisions that we are making, particularly the discretionary power of the Secretary of State, apply to a very few cases—what one might call borderline cases—within the mainstream of applications which will be coming in in the normal course, either immediately or as soon as five years residence has been completed, under either Section 6(1) or Section 5A.
I hope that that is sufficient explanation of this rather complicated-looking amendment, and that hon. Members opposite who have put down separate amendments relating to the discretionary power of the Secretary of State, will accept that their purpose is sufficiently covered by the last two lines of Amendment No. 26.

Amendments Nos. 24 and 25 are simply technical amendments, consequential on No. 26, to paragraph 2.

Mr. John Fraser: I am happy about the new drafting and that the Home Office has accepted the advice that I offered in the closing stages of the debates on the Bangladesh Bill—that an element of flexibility for hardship cases should be introduced. There may be people who find it very difficult to determine their status, especially if they were born in Bangladesh but resident in Pakistan or vice versa.
I am happy with the redrafting by one word of our amendments, and certainly shall not press them any further.

Amendment agreed to.

Amendments made: No. 24, in page 6, leave out lines 22 to 24 and insert:
'(a) paragraph 2 above shall have effect as if the references to the United Kingdom in sub-paragraphs (1)(b) and (2) thereof were references to the colony or protectorate, and'.
No. 16, in line 25, leave out 'paragraphs 1 and' and insert 'paragraph'.
No. 25, in page 6, leave out lines 31 to 33 and insert:
'(a) paragraph 2 above shall have effect as if the references to the United Kingdom in sub-paragraphs (1)(b) and (2) thereof were references to the associated state, and'.
No. 17, in line 34, leave out 'paragraphs 1 and' and insert 'paragraph'.
No. 18, in line 42, leave out from beginning to end of line 45.—[Mr. Lane.]

Schedule 3

FURTHER TRANSITIONAL PROVISIONS

Mr. Deputy Speaker: We come now to Amendment No. 19, with which No. 21 is to be discussed.

Mr. John Fraser: rose——

Mr. Deputy Speaker: Mr. Kaufman.

Mr. Kaufman: Would it be in order for my hon. Friend the Member for Norwood (Mr. John Fraser), on the Front Bench, to move his amendment first? That would be acceptable to me if it were acceptable to the House. Otherwise, of course, I will move mine.

Mr. Deputy Speaker: May we just check? I think that what is intended is that Amendment 21 should be called, and that it should be discussed with the following amendments: No. 19, in page 7, line 5, after 'shall' insert 'continue to'.
No. 20, in page 7, line 7, leave out from 'Act' to end of line 23.

11.45 p.m.

Mr. Kaufman: I beg to move, Amendment No. 21, in page 7, line 7, leave out from 'Act' to end of line 26 and insert:
'(2) A person who by virtue of section 1(1) of this Act ceases to be a Commonwealth citizen but who by virtue of any rule of law or enactment was not liable to removal from the United Kingdom under the powers in that behalf contained in Schedule 2 of the Immigration Act 1971 shall not cease to be immune from removal'.
I am placed in a somewhat embarrassing position, Mr. Deputy Speaker, in that I am anticipating a much more authoritative speech from my hon. Friend the Member for Norwood (Mr. John Fraser). Nevertheless, procedure has obliged me to speak first.
This is the single occasion in our proceedings this evening when some harsh words will have to be spoken. In Committee, on a large number of matters the Under-Secretary promised to be forthcoming and in every case except this one he has been forthcoming in a way which is appreciated by myself and by other hon. Members. But although I dislike being harsh with the hon. Gentleman, on this matter he has failed us.
When this matter was raised by hon. Members on both sides of the Committee, the Minister responded immediately in a tone which we have come to expect from him and which we found most acceptable. With regard to the fears which have been raised by the hon. Member for Bradford, West (Mr. Wilkinson) and my hon. Friends, the Minister said on 3rd July:
I do not believe that these fears are justified, but we shall look into them carefully in the light of everything that hon. Members on both sides have said. If we feel that there is an unintended anomaly, or anything unfair or unsatisfactory about these provisions, particularly relating to liability or not for deportation, we shall bring forward an amendment on Report.—[OFFICIAL REPORT, Standing Committee A, 3rd July, 1973; c. 361.]

That being so, I cannot understand why the appropriate amendments have not been brought forward by the Government. The Minister said that they would look carefully into the case that had been made. If they have done so and if they do not believe that there is an unintended anomaly, the only alternative is that they believe that there is an intended anomaly, and that the consequences of the Bill as it stands are what the Government wish.
I cannot believe that that can be so. The best way in which I can attempt to bring home to the Government the fears held by some of my hon. Friends is by reading to the House a letter which I received from a Pakistani in Manchester who alerted me to this problem. He puts it far better and far more succinctly and dynamically than I could put it. He wrote to me as follows:
I must draw your attention to a very important clause of the Pakistan Bill. Massive deportation of Pakistanis will follow the passing of the Bill in its present form.
I depart from the letter to say that the Minister may well say that there are not to be massive deportations. Nevertheless, he must accept that this is the feeling among Pakistanis. The Government have done so much to assuage feelings of fear and panic, but it is necessary on this issue, too, for them to do that, and by writing something into the Bill and not simply giving us assurances. In returning to the letter I shall come to what is thought of assurances which have been given.
My correspondent went on to say
I will try to explain how serious the situation is. Section 7 of the Immigration Act 1971 lays down that Commonwealth citizens who have resided in this country for five years shall not be deported. Schedule 3 of the Pakistan Bill says that for the purposes of the above section Pakistanis will cease to be Commonwealth citizens six months after the Pakistan Bill becomes an Act.
Of course, it is now 12 months after the commencement of the Act.
My correspondent went on:
Therefore, they can then be deported even if they have remained here for five years.
There are quite a few persons in this country who came here before Pakistan left Commonwealth and who will complete five years here before becoming aliens under the above mentioned Schedule 3.


Between the date of completing five years and becoming alien they cannot be deported because of the Section 7 of the Immigration Act 1971. But the moment they become alien then notwithstanding their previous immunity they will get their marching orders. People will make many protests but it will be far too late.
One may ask at this stage"—
I am still reading from the letter, because it puts the matter very well—
doesn't the Pakistan Bill give all the Pakistanis 12 months to apply for UK citizenship and thus avoid deportation. The answer … is No. Pakistan Bill does not give anyone who does not qualify under the Immigration Act 1971 a right to apply for UK citizenship.
Because of the strict criteria laid down by the Immigration Act 1971 (Schedule 1) not all the Pakistanis who are here can either now or in future apply for UK citizenship—for example, those who have limited leave to remain here cannot apply.
In comparison, the Section 7 of the Immigration Act 1971 is much more generous. It gives all Commonwealth citizens (which at the present moment includes Pakistanis as well) protection against deportation if they have lived here for five years. The only condition is that they should have entered the country properly.
You can, therefore, imagine the position after the protection of the above Section 7 is lifted. The Home Office does certainly have a record of those who have a limited leave to remain here but who cannot be deported after residing here for five years. There will be no need to seek these people out. They will be there at their known addresses believing that they have become exempt from deportation not knowing that the Pakistan Bill has changed everything …
I hope that you will agree that the Pakistan Bill should not be made a vehicle for deportation in large numbers of those who came to this country before Pakistan left Commonwealth and who complete five years of residence here before becoming aliens.
Then my correspondent goes on to mention assurances. This is why I make it clear to the Government that for me assurances are not enough; because, as I have said in proceedings on previous Bills, assurances get buried away in bound volumes of Committee proceedings and of our proceedings in the House, but the courts can be guided only by enactments by Parliament.
My correspondent concluded:
… is it true that the Government had assured earlier that those Pakistanis who were here at the time when Pakistan left Commonwealth will not be affected in any way. Pakistan Bill certainly does not follow this statement on the question of deportation. Secondly"—

this is directly relevant to the Under-Secretary—
if I am not wrong I heard Mr. David Lane say on a TV programme for Asian viewers that nobody will be deported because of Pakistan Bill. If so, the Bill itself should have said this.
I do not believe that the Government intend that the Bill shall be made a vehicle for deportations of people who thought that they were safely here. I do not believe that the Government wish this to be so. But as night follows day the Bill, if it is passed in its present form, despite any good will by Ministers, will be made a vehicle, because the courts will be able to interpret it in no other way.
When the Government have been as forthcoming as they have on so many of the other points we put forward, and if they ask us to accept their good faith on this issue, I cannot understand why, if our amendments are not satisfactory, they have not brought forward more satisfactory amendments of their own as they have on other issues which we have passed without cavil this evening.
That being so, I greatly trust that the Under-Secretary, whose good faith we have very much come to accept during the proceeding on the Bill, will tell us that the Government will bring an amendment forward in another place. It has been made clear that the Government do not intend to accept my amendment or the more satisfactory amendment in the names of my hon. Friends on the Front Bench. That being so, I hope that the genuine, real and basic fears of Pakistanis who think that the Bill will be used to throw them out of this country will not be simply assuaged by soothing words by the hon. Gentleman but will be removed by the Government amending the Bill in a way which will be found acceptable.

Mr. John Fraser: As my hon. Friend the Member for Manchester, Ardwick (Mr. Kaufman) said, this is the only really contentious point on the Report stage of this Bill. It is at the very end of the Bill, late at night, and yet I make no apology for raising this matter at this time.
One of the things which we learned from the Immigration Act 1971 was that in the labyrinthine verbiage which one


finds in schedules there may be restrospective provisions. There may be provisions which take away rights which people believe they have. They may be matters which affect very severely the liberty of the subject, and it is the duty of every Committee and of this House to look at every line and part of a Bill to make sure that these things do not go through, at any rate, uncontested.
It is not that one condones illegal immigration or a breach of the immigration rules. Nor do I view with satisfaction what has been a feature of some past immigration Acts that they contain provisions which allow a kind of cat-and-mouse game to be played between those who come to this country and the authorities. Be that as it may, there is no doubt that certain immunities and amnesties were granted by the Commonwealth Immigrants Act 1962, by the 1968 Act and by Section 7 of the Immigration Act 1971. The point at issue on the amendment is whether those immunities and amnesties are to be withdrawn or not.
The amendment falls into two parts. I will deal first with, as it were, the second part of the amendment—the printed words on the Amendment Paper. The purpose of those words is to protect those who are still immune from removal, as opposed to deprivation, because although they were totally illegal immigrants but had not been refused admission to this country, they had, if they came before the passage of the Commonwealth Immigrants Act 1968, a common law right of entry to the United Kingdom as Commonwealth citizens. Even following the House of Lords decision in Director of Public Prosecutions v. Azam, those people are still immune from removal under Schedule 2 of the Commonwealth Immigrants Act 1971.
The latter part of this amendment seeks to restate that immunity notwithstanding the passage of the Pakistan Bill as a result of which they will lose their British citizenship and as a result of which they may lose common law rights of entry to the United Kingdom which they had before 1968. That deals with one part of the amendment.
The other part is one of rather more substance. It relates to an amendment to Schedule 3 which, if carried, would

have the effect of continuing the protection of Section 7 of the Immigration Act 1971 to Pakistan citizens notwithstanding that they ceased to be British citizens upon this measure coming into force. Section 7 of the Commonwealth Immigrants Act 1971 gave an amnesty to Commonwealth citizens who entered the United Kingdom perfectly lawfully at any time after 1962 but before 1st January 1973. It only protects people who came in lawfully and who came in before 1st January 1973 and who, when the Home Secretary decided to make an order to deport them, could fulfil the condition that they had been ordinarily resident here for five years.

12 midnight.

They may not entirely escape the provisions of the Immigration Act 1971, because in Section 7 "ordinarily resident" is defined as being resident in the United Kingdom and not subject to any restriction on the time a person may remain, but in section 7 there is a special exception where "ordinarily resident" means ordinarily resident while in breach of the immigration rules. There is a further exemption in the clause concerning deportation on grounds conducive to the public good, but I need not go into that.

The only ground on which the Home Secretary would seek to deport someone who entered lawfully but was in breach of the immigration restrictions, apart from conviction and apart from the ground of not being conducive to the public good, would be that he had remained here in breach of the conditions put upon his leave to enter the United Kingdom. Schedule 3 takes away the immunity and renders that person liable to be deported for being here in breach of the immigration laws when he becomes an alien, although by Section 7 of the 1971 Act so long as he remains a Commonwealth citizen he is immune.

There is a saving provision in Schedule 3. It says that if within one year of 1st September a Pakistani applies to register as a United Kingdom citizen and is subsequently granted registration the immunity accorded by Section 7 of the 1971 Act will continue. Once he becomes a United Kingdom citizen he cannot be reported in any case. But the saving provision is meaningless in most cases and there is a catch in it. Under


Section 5(a) of the British Nationality Act 1948 a person is not qualified to register as a United Kingdom citizen if in breach of the immigration laws—that is in breach of the conditions of entry. The very reason for granting an amnesty under Section 7 is also the very reason why the saving provisions of Schedule 3 of this Bill cannot be used. Most people were given immunity because they had been here for five years in breach of conditions. But because they had been here for that time in those circumstances they could not apply to register for United Kingdom citizenship. The protection which seems to be afforded by Schedule 3 is entirely illusory.

We cannot again commit Parliament to changing the status and security of people who are ordinarily resident in this country so that they lose the immunity conferred upon them. It is not good enough for Parliament from one Act to another retrospectively to withdraw the amnesty affecting the status of those who are here and who believe themselves to be secure—and it could be someone who entered this country as long ago as 1963. It is wrong to deprive these people of the immunity and security which they believed they had, and I hope therefore that the House will support me in the amendment.

Mr. Wilkinson: I shall not detain the House for long but only to explain why I raised this matter in Committee. It seemed to me that a distinction could be drawn in the schedule between what in practice will happen to Indians, Bangladeshis, West Indians and other Commonwealth citizens, and what can happen to certain Pakistanis who are unable to become British citizens because they will be unable to qualify for registration.
I wondered whether it was appropriate that something of this kind should be introduced at the back of the Bill and not be applicable right across the board in some other piece of legislation. What we see in Schedule 3 is probably not nearly as punitive as hon. Gentlemen opposite imagine. So long as people are applying for registation, all is well. The trouble arises over those who cannot qualify.
We must ask ourselves whether it is the Government's wish that those who have overstayed and should not be here should enjoy the right to become British citizens. This is very much what is at issue.
The critical part of Schedule 3 is in paragraph 1(2):
Nothing in this sub-paragraph shall prevent the said person's being recommended for deportation under section 3(6) of the Immigration Act 1971".
Section 3(6) of the Immigration Act refers to the provisions for deportation of non-patrials, but, as I see it, only those convicted of an offence. So it is right for the Under-Secretary to claim, as he did on television, that no one will be deported under the provisions of the Bill. Certain people will not be able to become British subjects by registration because they are unable, according to the British Nationality Act, to qualify. But they could be subject to deportation if they commit an offence. If so, the provision is not nearly as punitive as hon. Gentlemen opposite make out. Perhaps my hon. Friend will clarify that point. None the less, I think that I was right, at the conclusion of the Committee stage, to raise this issue because it is important for the reasons that I have adduced.

Mr. John Fraser: Before the hon. Gentleman sits down, may I draw his attention to Section 3(5)(a) of the Immigration Act 1971, which provides:
A person who is not patrial shall be liable to deportation from the United Kingdom—
(a) if, having only a limited leave to enter or remain, he does not observe a condition attached to the leave or remains beyond the time limited by the leave".
Surely the point that I made is valid: that anybody who is in breach of his leave to enter is subject to deportation.

Mr. Wilkinson: This is a point on which I should like clarification by my hon. Friend. I notice that clearly it is Section 3(6) that is specified in the schedule, not Section 3(5)(a). If only Section 3(6) is specified, I presume it is for a purpose. I look to my hon. Friend to clarify this very point.

Mr. Bruce Douglas-Mann: I sincerely hope that the interpretation that we have just heard suggested by the hon. Member for Bradford, West (Mr. Wilkinson) is correct.
I shall not detain the House long, because we have had an excess of long speeches tonight.
It is perhaps appropriate that Amendment No. 21 should be debated after midnight as the relevant clause of the Immigration Bill was also debated after midnight. Schedule 3 of the Pakistan Bill takes away the effect of express assurances which were given in debates in Committee on the Immigration Bill by the then Home Secretary the right hon. Member for Barnet (Mr. Maudling). I have the report of the Standing Committee on the Immigration Bill of 18th May 1971 dealing with Clause 7. In the course of moving amendments to Clause 7 my hon. and learned Friend the Member for Dulwich (Mr. S. C. Silkin) said:
The effect of the amendment I am moving on behalf of my hon. Friends and myself, would be to accomplish the purpose which the right hon. Gentleman suggested.
The right hon. Member for Ashford (Mr. Deedes) had suggested that there should be an amnesty for those who had entered illegally previously. My hon. and learned Friend then said:
It would mean that these people, provided that they were here in July, 1971, irrespective of whether they were in breach of immigration control—that is to say, whether they were here legally or illegally—would be free from the threat of deportation.
A short while later my hon. and learned Friend said:
It would be better to wipe the slate clean, as the right hon. Member for Ashford suggested earlier … 
In the course of the debate on Clause 7 the then Secretary of State for the Home Department said:
I hope that I can help the hon. and learned Gentleman. This Clause deals with exemption for existing residents….
I made it clear earlier that I wanted to be able to say that there was no change in the position of those who are already here. There are some respects under the clause as drafted in which the position of those already here is altered. I am inclined to think that that was wrong, and I shall change it….
On subsection (1), the position is that at present Commonwealth citizens are liable to deportation under Clause 3(6), that is, on a criminal offence and a recommendation. They are exempt from deportation after five years' residence here.
I shall not burden the House with reading long extracts, but the then Secretary of State for the Home Department said that he was prepared to recommend fur-

ther amendments to the Immigration Bill to make it clear that with regard to deportation either on an offence and a recommendation by the courts under paragraph (b) on "non-conducive" grounds —
… the position of those already resident here at the end of July, 1971, will not be worsened in any way by the Bill. I hope that that will satisfy the hon. and learned Gentleman.
What applied to those whose presence was not conducive to the public good was naturally taken to apply, even more strongly, to those against whom there was no complaint but who were merely liable under paragraph (a) for having overstayed. So, later, on the same amendment, my hon. Friend the Member for Aberdeen, North (Mr. Robert Hughes) said:
I should like to see in cold print the remarks made by the Home Secretary and study them, because I cannot see how subsection (2) will be changed. None the less, having received his assurance, I beg to ask leave to withdraw the amendment."—[OFFICIAL REPORT, Standing Committee B, 18th May, 1971, c. 961–73.]
I have studied the Home Secretary's remarks in cold print and there is no doubt about the assurances which he had given to the Committee. What was intended by Section 7(2) of the Immigration Act was to give an immunity to those who were here. What is done by Schedule 3 of this Bill is to withdraw that immunity in complete defiance of the assurances given to the Committee in 1971.
I was one of a group of hon. Members who were most active in promoting and presenting the cause of Bangladesh at the time of the tragic events of 1971. But neither I nor my hon. Friends wished, in supporting the cause of Bangladesh, to indicate any hostility to the people of Pakistan. We did not wish Pakistan to leave the Commonwealth. Even less did we wish to express an antagonism to the people of Pakistan living in this country. By supporting the rights of self-determination of the people of Bangladesh we had no hostility to the people of Pakistan.

Mr. Wilkinson: The hon. Gentleman said that this provision was taking away the immunity of Section 7(2) of the Immigration Act 1971. I cannot see that that is so. It is not spelled out that


that is so in the schedule. It is not the case that the elasticity period is a year after the enactment of the legislation. It is only "taking away" in the sense that these people will not be Commonwealth citizens unless they register as United Kingdom citizens. In that case that immunity would lapse anyway because Section 7 refers only to Commonwealth citizens and the people of the Republic of Ireland. I cannot see that the hon. Gentleman is making a valid point.

12.15 a.m.

Mr. Douglas-Mann: I hope that the hon. Gentleman is right and that this immunity is not withdrawn. But Section 7 of the Immigration Act says:
Notwithstanding anything in section 3(5) or (6) … but subject to the provisions of this section, a Commonwealth citizen … who was such a citizen at the coming into force of this Act and was then ordinarily resident in the United Kingdom—
(a) shall not be liable to deportation …".
in the circumstances then set-out.
I hope I am wrong, but my interpretation is that, in order to qualify for exemption under that provision, one has to have been a Commonwealth citizen both at the time the issue arises and at the time of the commencement of the Act. If I am right, it means that someone who may have entered the country legally in 1963, who has been living here a perfectly blameless life and who may have his family and his home here, will suddenly, as a result of actions over which he had no control—actions by the former President Yahya Khan and of the present President Bhutto of Pakistan—become liable, after 10 years or more in this country, to deportation.

Mr. Kaufman: It might be of assistance to my hon. Friend if I intervene now. I think he has put his finger on the nub of the matter, and it is important that the hon. Member for Bradford, West (Mr. Wilkinson) should accept this point too. As I understand it, Section 7 of the Immigration Act conferred an amnesty on Commonwealth citizens who had, as it were, outstayed their leave here. Schedule 3 of this Bill continues that amnesty up to, and only up to, the end of the period of grace—that is, 12 months plus any period of flexibility after the commencement of this Bill. The

wish of the Government and all those hon. Members who voted for the Immigration Act was that all those covered by Section 7 of the Act should have an amnesty, but Pakistanis are now being retrospectively deprived of that amnesty solely because of the withdrawal of Pakistan from the Commonwealth and not because of any changes in the material circumstances of those affected.

Mr. Douglas-Mann: I think my hon. Friend has expressed the situation excellently. This is something which has happened to people who have been resident in this country, who have made their homes here. It has happened because of things over which they had no control. I sincerely trust that it was not intended by the Government. Equally, I trust that the retroactive provisions of the Immigration Act were wished on the Government by the House of Lords rather than by the deliberate design of the Home Office. The Home Secretary has suggested that this is not, indeed, the case, but I give the Home Office credit for being rather less disingenuous than would be the case if it had given the assurances which it did give the House when the Immigration Act was before it while being aware at the time that the measure would have the effect that it has had.
As my hon. Friend the Member for Manchester, Ardwick (Mr. Kaufman) has said, as a consequence of Pakistan leaving the Commonwealth, under the Bill people who have been resident here, leading blameless lives, have suddenly become liable to deportation. It may be that an interpretation can be placed on the Bill that it does not have the effect that we fear, and I trust that the Government will be able to give us that assurance. If they cannot, although it may not be appropriate to press the matter to a vote tonight, I hope that our noble Friends in another place will ensure that the matter is reviewed.
The Government have not perhaps fully understood this point. It arose late in Committee. I hope that they will take an opportunity of ensuring that the Bill is humane in this respect as it is in others, now it has been amended. At present it cannot be regarded as humane if Schedule 3 has the effect we fear it may have.

Mr. Edward Lyons: I was a member of the Committees which considered the


Immigration Bill and the Pakistan Bill. The Immigration Act is unusual in that it is said that certain classes of Commonwealth citizen could not apply for British citizenship because they had been allowed into the country for limited periods. At the same time, Section 7 laid down that they could not be deported. It is this group of persons with whom we are now concerned.
They were given immunity against deportation while being forbidden by Schedule 1(2) of the Immigration Act from applying for citizenship. By Schedule 3 of this Bill that immunity given to people who might loosely be called "over-stayers" is being withdrawn, to be effective 12 months after the implementation of this measure which will be 1st September 1974.
That means that every Pakistani "over-stayer" will be eligible for deportation after having had the immunity granted by Section 7 of the Immigration Act withdrawn. Whether that is right or wrong it removes existing rights of immunity expressly given by the 1971 Act. The result will be that a considerable number of Pakistanis who had immunity will be eligible for deportation after 1st September 1974. That can only cause a considerable amount of unease because it will be left to the discretion of the Home Office whether such persons are to be deported. The Government should consider this again because the principle of retrospective legislation seems to be developing far too quickly.

Mr. Robert Redmond: I find it much against the grain to rise in this House after ten o'clock and I apologise not only to you, Mr. Speaker, but to myself. It is however, important that we should be clear about what we are doing here. I want to make it clear that I want to be clear about what is happening. I want to ensure fairness all round and I want to see that we do not water down the Immigration Act in any way that will cause trouble for community relations.
The reason I feel so strongly about this is as a result of the line I took in Committee. I was reported rather prominently in my local newspaper as having voted the same way as my right hon. Friend the Member for Wolverhampton, South-West (Mr. Powell). This brought me the sort of letters I normally

get from people in Bolton when my right hon. Friend makes a speech on immigration, letters I do not like receiving. They are racialist letters and I think my right hon. Friend knows the people who write to me like this. Two days later I was asked to meet the members of the Pakistan Society in Bolton to discuss with it the problems of the Azad Kashmiris. Members of the Press were present, not at my wish but at theirs, and a photograph was taken of me with the Azad Kashmiris. People had written to me saying that I had done the right thing in voting as I had and then wrote vile letters associating me with the Azad Kashmiris. Because of the strength of feeling which has been stirred up, and because the Bill is regarded by many people as an immigration measure, we must be particularly careful in dealing with the schedule.
Pakistanis will have the right to take 12 months to make up their minds about whether they wish to register as United Kingdom citizens. If they decide not to do so, they will have decided that they do not want to be British subjects, for some reason which probably will be very good to them. Therefore, they will have decided that they wish to become aliens. They will have chosen not to be Commonwealth citizens by their own act and therefore will have taken themselves outside the provisions of the Immigration Act.
I wish my hon. Friend the Under-Secretary, not to give assurances, but to define who is right—the Opposition or my hon. Friend the Member for Bradford, West (Mr. Wilkinson).

Mr. Kaufman: I do not think that anybody in this Chamber or the Pakistani community would suggest that somebody who chose to be an lien in the way the hon. Gentleman is describing should be given immunity which was orginally extended to Commonwealth citizens. I would not suggest that. The problem is that immunity will be taken away from people not eligible to register for Commonwealth citizenship.

Mr. Redmond: I want a clear explanation, not assurances.

Mr. Lane: In the Government's view, it is not possible to continue indefinitely to treat citizens of Pakistan as if they still enjoy safeguards which were given


to them because they held the status of Commonwealth citizens. I shall try to persuade the House that the effects of the amendments goes very much further than the relatively narrow point we have been mainly considering.
There has been a great deal of exaggeration and misunderstanding which I hope to clear up. I want to allay fears which mostly are unnecessary, but I shall tell the House as clearly and frankly as I can what the effect of the Bill will be and how it will be administered.
I deny that there is any vicious circle, as was suggested by the hon. Member for Norwood (Mr. John Fraser). I deny the charges of bad faith made against the Government. I deny that there is any reason for undue alarm in the mind of the correspondent of the hon. Member for Manchester, Ardwick (Mr. Kaufman), whose letter the hon. Member read out. I deny some of the wilder thinking reported in The Guardian this morning—for example, a statement said to have been made by the Chairman of the Pakistan Action Committee that the Government had
secretly put in clauses which would make thousands of long-standing Pakistani residents in Britain liable to deportation. This is a serious step towards enforced repatriation.
I absolutely deny that it is any such thing.
First, I clear up two small points raised by the amendments. As the hon. Member for Norwood said, taking the wider of the three amendments, namely, No. 21, which covers the same ground as Amendments Nos. 19 and 20, the words in it were intended to safeguard the position of illegal entrants—and I emphasise "illegal entrants"—in the sense in which we have been recently considering the position of illegal entrants affected by the recent House of Lords judgment about the effect of Schedule 2 of the Immigration Act 1971.

12.30 a.m.

I wish to make clear tonight, as I did in Committee, with reference to illegal entrants in that sense, that a Pakistani who is not now liable to removal as an illegal entrant will not become liable for removal on becoming an alien. I refer here, for example, to somebody who came here before 1968 without any

contact with the immigration authorities. To put it another way, if he is not now a illegal immigrant liable to removal, nothing in the Bill will make him an illegal immigrant. I hope that that clears up the point about illegal entrants as distinct from overstayers, as it is overstayers that we are mainly considering here.

I should make one small reference to Amendment No. 21. I am puzzled as to why it seems to delete from the Bill paragraph 1(4) of Schedule 3, which extends Section 36 of the Immigration Act to the Channel Islands and the Isle of Man. I am sure that that is not something that we want to do, and I do not think that the hon. Gentleman meant to do it. I certainly could not recommend the House to accept that part of the amendment. However, that is a point of detail.

The nub of the amendment lies in the removal of lines 7 to 9 on page 7. If we were to do that, we should, in effect, be giving a blanket and perpetual exemption from deportation to Pakistanis who at some point became aliens. I cannot recommend the House to accept that proposal.

Let us try to see the matter in perspective. The vast majority of Pakistanis now in this country will be able to register as United Kingdom citizens and will thus be able, without interruption, to gain continuing exemption from deportation, according to the provisions of Section 7 of the 1971 Act. The concern which has been expressed both here and outside the House is confined to a very small number of people, people who have overstayed, that is, people who have deliberately broken the law of this country. I stress that at the outset.

If I explain how the transitional provisions are to work, I may thereby clear up several of the questions which have been raised. The House should bear in mind that aliens may be deported, however long their residence in the United Kingdom, on a recommendation by a court following conviction of an imprisonable offence or for breach of conditions, or because the Secretary of State decides that their presence is not conducive to the public good.

Up to 1st January this year, Commonwealth citizens could be deported only


on a recommendation by a court following conviction of an imprisonable offence or for breach of conditions; and in either case only if they had not then been ordinarily resident here for five years.

The effect of the 1971 Act was to bring Commonwealth citizens into line with aliens by providing that in future Commonwealth citizens should be liable to deportation on conducive grounds and that length of residence should cease to be a ground for exemption.

As the House knows, Section 7 of the 1971 Act provided safeguards for Commonwealth citizens who were ordinarily resident in the United Kingdom on 1st January 1973. Such people, if they remain ordinarily resident here, are not liable to deportation on conducive grounds and acquire exemption from deportation on all other grounds when they have completed five years' continuous ordinary residence.

For the purposes of Section 7, as one or two hon. Members have said, a person ordinarily resident in the United Kingdom does not cease to be ordinarily resident by reason only of his remaining in breach of the immigration laws, for example if he remains beyond his permitted stay in this context.

We are concerned mainly with the position of Pakistanis who have remained beyond their permitted stay and have been ordinarily resident here for five years. As matters stand they are immune from deportation under Section 7 of the 1971 Act. But they would become liable to deportation under Section 3(5(a) of the 1971 Act after 12 months from the commencement date of the Bill if it remains in its present form. It is also relevant to make clear that over-stayers in these circumstances would not be entitled to register as subjects of the United Kingdom and Colonies because they are subject to restrictions on their stay.

It has been argued that it is wrong to withdraw this immunity from deportation from Pakistani overstayers more or less on the same ground as it was argued that it was wrong to make illegal entrants liable to removal. But our view is that it would be wrong to allow subjects of Pakistan who have deliberately overstayed and eluded detection to preserve

their immunity from deportation on becoming aliens. That was a concession in the 1971 Act for Commonwealth citizens as such, and citizens of Pakistan would lose it as a consequence of their country leaving the Commonwealth.

There is no case on merits for being indulgent to deliberate overstayers——

Mr. Kaufman: Does not the hon. Gentleman accept that no one in this House suggests that such an immunity be conferred on aliens? What we are putting to him—and I fear that he is not sufficiently seized of the point—is that this immunity is not one which will be conferred but one which was conferred on Pakistanis as Commonwealth citizens, which they will remain until one year after the commencement of this Act. It was conferred upon them even before the introduction of this Bill, and the Government therefore are not saying that aliens shall not be provided with an immunity. They are saying that an immunity which was conferred on people who were Commonwealth citizens shall now be taken from them simply because, through no fault of their own, they have become aliens. I find this quite astonishing.

Mr. Lane: I am entirely seized of the point. But we are saying that we are not prepared to recommend the effect of these amendments which would be to extend this immunity in a blanket way indefinitely to people who, for example, in due course become aliens having previously been Commonwealth citizens of their own choice. But I do not shirk the argument on the narrower point of the overstayers whom we are discussing. The immunity was conferred on Pakistani citizens as Commonwealth citizens. We are arguing that we are not justified in continuing that immunity for Pakistanis who at some point may become aliens.

Mr. Wilkinson: My hon. Friend is saying in fact that I was wrong in supposing that they could, when they became aliens, only be deported if they committed a criminal offence, and that the wider interpretation under Section 3(5)(a) will apply to them. if that is the position, why was not it spelt out in the schedule? Why was it that only Section 3(6) was put into the schedule? This is slightly misleading.

Mr. Lane: My hon. Friend is right when he says that the liability is wider than he at first thought. It comes mainly under Section 3(5)(a). The reason why Section 3(6) is referred to in the Schedule is that that involves a recommendation by the court which Section 3(5)(a) does not. Section 3(5)(a) rests on the discretionary action of my right hon. Friend the Home Secretary.

Mr. Richard: The hon. Gentleman is making the point that if these amendments were accepted we should be extending the immunity, which in Section 7 of the Immigration Act 1971 is confined to Commonwealth citizens, to cover aliens, and that that is a principle which the Government cannot recommend. Let me put the converse to the hon. Gentleman. The difficulty arises because people who have immunity under Section 7, and the people about whom we are talking, do not have the right to register because in another section of the 1971 Act the argument is that they are not ordinarily resident for the purposes of registration.
Would the Government be prepared to concede, in relation to Pakistanis who are in a unique position, that even though they cannot extend the blanket immunity of Section 7 to cover aliens, nevertheless they should make some provision to allow Pakistani overstayers, who if Pakistan had remained in the Commonwealth would have been covered by Section 7, the right to register? Cannot one deal with the point by looking at it from the other side?

Mr. Lane: We cannot do it as thoroughly as the hon. and learned Gentleman is suggesting, but I shall come in a moment to explain how this would work out in practice, which goes some way towards meeting these anxieties.
I was saying that, on merit, there is no argument for being indulgent to people who have deliberately overstayed in this country, but there may be some cases in which my right hon. Friend would be willing to remove the restriction on their stay so that they might become registered as citizens of the United Kingdom and Colonies and therefore regain or retain their immunity from deportation.
In considering such cases the whole of the overstayer's circumstances would be taken into account, and I remind the

House that as a further safeguard there is the right of appeal which anyone can exercise against deportation for breach of conditions, which would be the case if ever deportation proceedings were set in train against people in this category.
Perhaps I may make clear a few things about how this will work out in practice if the Bill goes through to Royal Assent unamended. First, the overstayers about whom we are talking will retain their immunity until September 1974—that is the extra year after the Act comes into force—so there will be no immediaate change in their circumstances. That is important. Secondly, during this intervening period any of those who wish to do so will be at liberty to come forward and try to regularise their position by getting in touch with the Home Office and asking for all their circumstances to be considered. That is something that happens fairly regularly in the administration of our immigration control. This is an everyday occurrence in other contexts with other Commonwealth citizens who may be temporarily in breach of the law. It is not unknown for them to come out and explain why they are in this situation and ask for their circumstances to be considered.
If such cases arise during the next 12 months while their immunity lasts my right hon. Friend will consider them according to all the criteria that he has been mentioning recently in another context. That length of time that they have been in this country, their employment record and their family circumstances must be taken into account if anything so drastic as deportation is being considered. If, despite all that, my right hon. Friend eventually decides that he is bound to exercise his right to deport because they have been in breach of their conditions and they have lost their immunity, there will be a right of appeal to the courts against my right hon. Friend's decision.

Mr. Douglas-Mann: rose——

Mr. Edward Lyons: rose——

Mr. Lane: I have given way a lot, and I know that the House wants to finish with this.
This is a matter which, in the end, will rest on my right hon. Friend's discretion. We believe that this provision


should remain in the Bill. There has been no mystery or misunderstanding about this. Taking into account the privileges of Commonwealth membership and the fact that these privileges are being taken away in some respects from Pakistani citizens by the actions of their own Government, we believe that this is a fair provision.
I stress that there is to be nothing arbitrary and nothing automatic about this. Those words have been used far too much. The Opposition go too far in the amendment. It would give blanket immunity far further than is necessary to cover this narrow point.
I trust that Opposition Members will regard as frank and clear the explanation I have tried to give of the reasoning behind the Bill and of the way it will work out in practice. I hope that they will not press their amendments. If, however, they do, I must recommend the House to vote against them.

12.45 a.m.

Mr. Douglas-Mann: Will the hon. Gentleman consider laying down minimum criteria so that someone who satisfied them could know that almost certainly he would get exemption and immunity from the Home Secretary? What he has suggested is that somebody should come forward and cast himself on the mercy of the Home Secretary. If the Home Secretary were to say "Assuming that somebody satisfies conditions A, B, C and D, we will in the circumstances grant him immunity", that would substantially meet the problem. Admittedly we are asking for blanket immunity, but the power in the legislation is a blanket liability to deportation.

Mr. Lane: Yes, it is blanket liability, but it would be exercised with discretion and flexibility. We have given a lot of thought to this in the context of illegal entrants. Our view is that to try to lay down precise criteria would make the whole procedure over-rigid. It is much better from an individual's point of view that his case should be considered absolutely according to its merits and circumstances by my right hon. Friend with his advisers.

Mr. Richard: The Minister has indeed given a frank exposition of the Govern-

ment's view, but the fact that it was frank does not make it any more satisfactory. We are grateful at least to know what is the Government's position, but the hon. Gentleman has not answered the powerful points that were made from this side of the House.
May I suggest a way out to the Minister? I hope that he will consider it between the passage of the Bill in this House and its arrival in another place. I put it to him in the spirit in which, as he would agree, the Committee stage was conducted, namely, that difficulties which were clearly seen to be difficulties were considered by the Committee and the hon. Gentleman said that he would consider the points which had been made. I think that anybody who served on the Committee would concede that on the whole he was very successful in meeting those difficulties.
The difficulty that arises here is that under Section 7 of the Immigration Act an immunity was granted to certain Commonwealth citizens who were covered by that section. Prima facie that would include the Pakistanis. It is perhaps not quite as stark, if that is not the wrong expression, as has been painted in some quarters, but there is an element of circularity in the argument because, at one and the same time, the hon. Gentleman is saying "We cannot grant the Section 7 immunity to aliens"—as a statement of principle that is something with which I have considerable sympathy—and, on the other hand, "I recognise that another section of the Immigration Act says that even if a Commonwealth citizen has been here for five years already, for the purposes of his application for registration as a United Kingdom citizen he is not deemed to be ordinarily resident in the United Kingdom." Thus the Pakistani overstayer, had Pakistan remained in the Commonwealth, would have had immunity under Section 7 but would not be eligible for registration under the other provisions of the Act.
I put this to the Minister, I hope, without rancour and certainly without malice. It seems to me that in these circumstances, where he is removing an immunity which people at present have—that clearly is the effect of what he is doing in the Bill—it is surely incumbent upon him to say that for those who have already been here for five years and are, therefore, covered


by Section 7, although technically they would not be eligible for registration under the other provisions of the Immigration Act, nevertheless in the circumstances the Government consider that registration by them would be acceptable. In that way we could overcome the difficulty in which we now find ourselves. There may be other difficulties but it would provide a sensible and reasonable answer to the problem.
I think that the Minister said that applications for registration by these people, who would have had Section 7 immunity until the passage of the Bill, would nevertheless be considered by the Government, although, under the other provisions of the Bill, they did not prima facie qualify, and that they would be considered sympathetically.
Otherwise, we are not happy with the Government's explanation. There is an element of discrimination in the provisions. It seems hard that a Pakistani who has been in this country for a decade, having overstayed his original terms of entry, should suddenly, through no fault of his own, because a Government with whom he has had very little contact for perhaps a decade, from whom he has not been able to shed himself because under the provisions of the Immigration Act he has not been eligible for registration in this country and is still not eligible, because he is an overstayer, have nothing provided in place of the immunity which is being removed.
It is in a spirit of conciliation that I make this suggestion. The Government should have another look at this. When the Bill reaches another place, I hope that they will be much more forthcoming. I would not at this stage advise my hon. Friends to divide—[Laughter.] I hear the hollow laughter from hon. Members opposite and I do not know why. I do not believe that it is coming from those who were on the Committee. If they had been on the Committee, and had seen how, perhaps under compulsion, the Government had been prepared to change their position, they would realise that we on this side who were on the Committee do not regard them totally as sinners beyond repentance. I consider the principle of the amendment to be a good one, and I hope that, when the Bill reaches another place, the Government

will come forward with something on these lines.

Mr. Lane: I cannot go as far as the hon. and learned Gentleman is asking, which I understand is to say that the Government should treat all the people about whom we are concerned—the deliberate overstayers, however long they have been here—as though they were fully entitled to register as United Kingdom citizens. I thought that I had gone a long way in giving reassurance and explanation, in saying that if that point arrives at which they want to try to regularise their position as citizens of the United Kingdom and Colonies, they are entitled to apply. It then rests on my right hon. Friend's discretion under Section 5A of the 1948 Act, and I tried to explain that he would exercise his discretion, although firmly, also sympathetically.

Mr. Richard: I am grateful to the Minister for saying that, but merely saying that the Secretary of State would exercise his discretion firmly but sympathetically is asking a lot of the Pakistani overstayer, who would have to exercise a considerable act of faith in the way in which the Government will behave. That is not reasonable. What the Minister should do, if he is saying. "Rely on the Goverment's good faith," is spell out the criteria on which the Government will judge the case—[An HON. MEMBER: "He did."] He did not, with respect. He said. "We shall be humane and sympathetic." He may be humane and sympathetic, but it does not follow that he will occupy his present position for the whole lifetime of this Government.

Mr. Deputy Speaker (Mr. E. L. Mallalieu): Order. Is the hon. and learned Member for Barons Court (Mr. Richard) making another speech? He should not do so.

Mr. Richard: I thought, Mr. Deputy Speaker, that the hon. Gentleman interrupted me just before or as I sat down. I promise that I shall speak only for another two minutes.
If the Minister is asking people to reply upon the good faith of the Government, he must spell out in a little more detail the way in which the Government will approach these applications, the criteria


upon which they will be judged and the circumstances in which the Government would be prepared to exercise discretion. Otherwise, the Minister is, in effect, asking for a blank cheque. One cannot expect Governments to be given blank cheques, particularly in these matters.

Amendment negatived.

Amendment made: No. 22, in page 7, line 20, leave out from beginning to end of line 23.—[Mr. Lane.]

Mr. Amery: I beg to move, Amendment No. 23, in page 7, line 38, leave out paragraph 3 and insert:
3.—(1) Sections 119 to 122 of the Companies Act 1948 (which make provision for the keeping of branch registers of companies in parts of Her Majesty's dominions outside Great Britain, the Channel Islands and the Isle of Man) and section 123 of that Act (branch registers of overseas companies kept in the United Kingdom) shall continue to have effect as if Pakistan had not withdrawn from the Commonwealth and the Pakistan (Consequential Provision) Act 1956 were not repealed by this Act.
(2) Sections 116 to 118 of the Companies Act (Northern Ireland) 1960 (which make provision corresponding to sections 119 to 122 of the Companies Act 1948) shall also continue to have effect as if Pakistan had not withdrawn from the Commonwealth and the Pakistan (Consequential Provision) Act 1956 were not repealed by this Act.
(3) At any time after 31st August 1974 the Secretary of State may by order made by statutory instrument repeal sub-paragraph (1) or (2) above.
(4) A branch register kept under section 119 of the Companies Act 1948 at any time before 1st September 1974 shall not be treated as improperly kept by reason that it includes members of the company resident in Bangladesh.
(5) A branch register kept under section 116 of the Companies Act (Northern Ireland) 1960 at any time before 1st September 1974 shall not be treated as improperly kept by reason that it includes members of the company resident in Bangladesh.
During Committee stage the Government spokesman indicated that consideration was being given to the question of branch registers kept in Pakistan by companies incorporated in Great Britain. This was in the light of representations received since the Bill was drafted.
The amendment will replace the previous provision whereby branch or "Dominion" registers kept in Pakistan by British companies had to be discontinued within six months of the Bill com-

ing into force. British companies will now be able to retain their branch registers in Pakistan for at least a year after the Bill comes into force.
After the expiry of that period the Secretary of State will be able to abolish the privilege; but this will require a specific positive decision on his part. Needless to say, if the Secretary of State did decide to repeal the provision he would give the companies concerned adequate warning of his intentions by means of publicity in appropriate journals.
Our object in proposing this amendment is to preserve the existing situation in relation to branch registers kept in Pakistan while the future of what are called Dominion registers generally is being considered. This is being done in the context of the wider review of company law which the Government now have in hand.
The amendment also brings within the scope of the year's transitional period Section 123 of the Companies Act 1948.
This enables Her Majesty by Order in Council to make provision for the keeping in Great Britain of branch registers by companies incorporated in Commonwealth countries. No order under Section 123 has yet been made in relation to Pakistan but the amendment preserves the existing situation for at least a year, as it does with respect to branch registers kept in Pakistan by British companies.

Mr. Kaufman: As the right hon. Gentleman the Minister of State is responding to an amendment of mine in Committee, which I withdrew on an assurance I ought to thank him for moving so comprehensive an amendment in reply to my extremely brief amendment.
I congratulate the right hon. Gentleman on his extremely speedy grasp of the complexities of this issue. In welcoming his highly ameliorative intervention at this late stage in the deliberations on the Bill, may I say that there are some of us who would have been equally grateful if he and not one of his right hon. Friends had made the visit abroad which interrupted the proceedings, because he would have been as ameliorative in the Middle East as he has been here this morning.

Amendment agreed to.

1.0 a.m.

Order for Third Reading read.

Mr. Amery: I beg to move, That the Bill be now read the Third time.
This is for many of us—perhaps for most of us—a rather sad occasion, not least for someone like myself whose personal and family relations with the subcontinent go back over some four generations. But it is the inevitable consequence of Pakistan's decision, announced on 30th January 1972, to leave the Commonwealth with immediate effect from that date.
We regretted the decision; but it was a decision that Pakistan was fully entitled to take.
Nothing that has happened in the 18 months since then has given us any reason to believe that the Pakistan Government intend to reverse their decision.
It follows that certain changes have now to be made in our laws to match Pakistan's decision to change over from being a Commonwealth country to becoming a foreign State.
In so doing we have sought to ensure as far as possible that the change of political relations between the two States—Pakistan and Britain—should not bear harshly on individual Pakistanis who have come to Britain or otherwise entered into special commitments here on the assumption that they could count on enjoying the advantages of being Commonwealth citizens.
Our Committee procedure is often criticised and I must freely admit that there were times, in the long vigils of the Committee stage of the Housing Finance Bill last year, when I could have been counted among the harshest critics.
It was not my privilege to take part in the Committee stage of the Bill now before us, but, having made some study of its proceedings, I would like to pay tribute to the contribution made by members of the Committee on both sides.
It was our intention from the first that the Bill should be just and humane, but I freely accept that the Bill which has emerged from Committee achieves our objectives in many ways better than the Bill which went into Committee.
Let me therefore mention briefly the main points on which our attention has focused, and the way in which the Bill

has been amended to the general advantage.
It follows from Pakistan's decision to leave the Commonwealth that citizens of Pakistan must acquire the status of aliens in this country.
It is worth emphasising at once that this is not a Bill which affects the number of people who will be admitted from Pakistan in the future. What we are dealing with here are the citizenship and other entitlements of Pakistanis who are already here.
In the Bill as introduced we had proposed transitional arrangements whereby persons who were full Pakistan citizens before 30th January 1972, the date Pakistan left the Commonwealth, and who were resident in this country before that date, would still for a time be entitled to apply for registration as citizens of the United Kingdom and Colonies after five years' residence.
A number of hon. Members suggested, however, that we ought to extend the same privilege to two categories of persons—to persons bearing Pakistan passports describing them as
natives of the former State of Jammu and Kashmir
and also to Pakistan citizens who had arrived in this country after Pakistan left the Commonwealth.
When we first drew up the Bill we did not extend the privilege of registration to these categories of people, first because
natives of the former State of Jammu and Kashmir
were not Pakistani citizens until February this year and, secondly, because Pakistanis who came to Britain after 30th January 1972 came from what was already a self-declared foreign, as distinct from Commonwealth, country.
I think the House will agree that in strict logic the original Bill was not unreasonable. A number of hon. Members on both sides of the Committee felt, however, that it would be more generous to treat these people in the same way as Pakistan citizens who arrived in this country before Pakistan left the Commonwealth.
The Committee therefore passed an amendment having the effect of extending the registration privilege to all Pakistani citizens who arrived in this country


before 14th May 1973, the date of introduction of this Bill.
Since persons in this country who originate from Azad Kashmir now have full Pakistan citizenship they are also covered by this amendment.
We think that the hon. Members concerned have made their point and we have therefore decided to accept these amendments.
The Government hope that the extension of transitional rights to people from Jammu and Kashmir will indeed, as has been urged in debate, make a contribution towards good community relations.
Another aspect of the Bill which calls for comment is the period of grace allowed after five years' residence in this country, to enable Pakistan citizens to apply for registration as citizens of the United Kingdom and Colonies. The period originally proposed was six months.
It has been suggested, however, that this period should be extended, partly because of the longer period allowed in the South Africa Act and partly because it was thought that many Pakistanis would need more time to make up their minds. We have accepted these arguments and have, therefore, amended the Bill so as to increase the period of grace to one year. We do not believe that any further extension is necessary.
The South African precedent is not an exact one. South Africa does not allow dual nationality and, therefore, South Africans were faced with a difficult decision whether they should cut their ties with this country or with South Africa. Pakistan does allow dual nationality and, therefore, Pakistanis who register as citizens of the United Kingdom will not thereby lose their Pakistan citizenship. We are satisfied that one year will be enough.
We have also extended to one year the period of six months which appeared originally in the Bill in Clause 3(1) which for a specified period exempts a Pakistan citizen from statutory disabilities imposed on aliens regarding the holding of certain offices and employments, and in paragraph 1 of Schedule 3 relating to exemption from deportation. If a person has made an application for registration the period of exemption will continue until it has been determined.
Finally, about voting, in Standing Committee a good deal of importance was attached to this question. It is important to all of us here. Hon. Members on both sides of the Committee emphasised the importance of finding some way of continuing the rights which Pakistanis enjoy at present as British subjects, and which most of them will enjoy again as citizens of this country. In particular it was represented that those who will have applied for citizenship by the time next year's register is made up should not be disfranchised for a year simply because the Home Office will be physically unable to process their applications as quickly as we should like. The amendments which we tabled on Report get over this difficulty and I think there is now a consensus of view in this House that the voting provisions in the Bill are fair and reasonable.
I should also like to repeat that this Bill is concerned with those persons of Pakistani origin who are already here. It is not an immigration Bill and it will have no significant effect one way or the other on the flow of immigrants to this country.
As I said at the beginning, Pakistan's decision to separate from the Commonwealth is a cause of sorrow to many of us. Our association with the Pakistani people, both in the long period of the Indian Empire and in the 25 or so years that Pakistan was an independent member of the Commonwealth, are facts of history and create links between our two countries which will long endure. Those links will be strengthened over the years by the presence in this country of the numerous communities of our Pakistani fellow citizens with whom all of us wish to live in harmony and friendship.
It is in the belief that this Bill makes the best possible provision for them to weather Pakistan's transition from Commonwealth to foreign status that I commend it to the House.

1.8 a.m.

Mr. Kaufman: It has been a treat to listen to the Minister of State, the right hon. Member for Brighton, Pavilion (Mr. Amery). One wishes that one had greater opportunities to listen to him because he has brought a bland friendliness to our proceedings which I for one found highly agreeable, and, although we valued the presence of his right hon. Friend the Member for Hertford (Lord Balniel) in Committee, we would have


liked him there, too. He would have enjoyed that Committee, unlike the Committee which considered the Housing Finance Bill.
Although this Bill emerges from this House not entirely in a form which meets my approval, because I am extremely unhappy about Schedule 3, nevertheless it is necessary to place on record my appreciation of the way in which the points which we made on Second Reading and in Committee have been met. Throughout our proceedings hon. Members on both sides and certainly myself have conducted ourselves on a non-party basis. We have tried to produce a Bill which is acceptable to the Pakistani community and to the other 55 million people who live in these islands. On Second Reading I appealed to the Government to exercise
a humane, compassionate flexibility as the Bill goes through the House".—[OFFICIAL REPORT, 22nd May 1973; Vol. 857, c. 332.]
I asked them to show themselves open-minded in view of the undoubted anomalies in the Bill. I outlined a number of those anomalies and other hon. Members outlined others. All of them were met in some way or other in Committee, in one case in spite of the Government.
As a new Member I hope that I may say without arrogance that this is a tribute to the way in which this House works that a Bill of this kind which was unsatisfactory but necessary has now turned into a Bill which is still necessary but far more satisfactory. I have not served on many Standing Committees. I have regarded all of them until now as a waste of time and I regarded Standing Committee procedure as an abuse. But as a Member of the Committee I have seen how an objective approach can produce an improvement in a Bill and I trust that this is the way in which other Bills can be improved in future.
Just as in Standing Committee the Minister offered us tenuous assurances which were later translated into agreed amendments, so I hope that the extremely tenuous assurances that he has given on the matter which caused great misgivings on Report will be turned into something more concrete in amendments in another place. I say that because no one in this

House approves of or condones illegal immigration into this country. No one could condone people who arrived under one guise and decided to stay under another. It is not our purpose in continuing to try to improve this Bill to attempt to condone those situations.
Nevertheless that situation has come about and people who thought they had an amnesty suddenly find themselves deprived of it. I trust that the Government will look at this again so that in another place they can have another go at getting it right in a way in which the citizens of this country white and coloured, will find acceptable.
I join the Minister in what he said about the loss of Pakistan to the Commonwealth. It will be widely appreciated both by the Pakistan Government and by the Pakistanis who are remaining in this country and who will take citizenship here. His words will be echoed on both sides of the House, and on that basis I wish Pakistan well and I trust that the Bill will have the best possible effects on community relations in this country.

1.14 a.m.

Mr. J. Enoch Powell: I would not wish that this Bill should finally leave this House before it was once again put on the record that at least one right hon. Member believes that it contains a major error of policy. I drew attention to it on Second Reading. I went on record in a minority of one in Committee and I wish briefly to go on record again before the Bill leaves us.
The Bill has recognised that Pakistanis, whether in this country or elsewhere, who have no other citizenship, are aliens. It is an old controversy, which is now entirely obsolete, whether they should have been so regarded at an earlier stage and whether legislative provision should have been made to deal with them sooner. At any rate, as from the coming into force of the Act, that is an undisputed fact.
As aliens, if resident in this country and fulfilling the necessary conditions, they have the opportunity to apply to become citizens of the United Kingdom and colonies by the process of naturalisation. For that purpose, like other aliens, they would require to show, as is right and proper, that they have a proper command of the English, or possibly Welsh,


language and that they are of good character as well as fulfilling the other conditions.
However, the Bill makes it possible for those who were in this country by 30th January 1972 to secure, when eventually the residence qualification, if they do not have it already, is fulfilled, automatic access for themselves and for their families to the status of citizens of the United Kingdom and colonies.
I consider it to be a manifest abuse and absurdity that at this day large numbers of persons who have no knowledge of the English language are, under our law, electors in this country and exercise the franchise. The franchise—I believe there is agreement between the two Front Benches on the necessity for an early change in our citizenship law—like most other privileges of a citizen in this country, still attaches to the status of British subject or Commonwealth citizen and not, as it would in any other country, to citizenship in the narrower and proper sense.
That is not something that we could deal with under the Bill or in connection with the departure of Pakistan from the Commonwealth. What we have chosen to do in the Bill is quite avoidably, voluntarily and unnecessarily to secure that privilege, which I have described as a manifest abuse and absurdity, to those who, by the free decision of their own Government, have become aliens.
I have no wish to deny to any alien of any origin the right to apply for the citizenship of this country and to submit himself to consideration for achieving that privilege on a par with any other. But I believe it is wrong to give that privilege automatically and freely when there is no necessity to do so, thereby not merely preserving, but enlarging, the scope of the misuse of the franchise of this country which exists at the moment. Our franchise, like the other aspects of citizenship, is, or ought to be, precious. Indeed, the conditions of naturalisation are an indication of what are regarded as the proper conditions for the exercise of it.
It goes without saying that no stricture upon the Bill which I have expressed in this context applies to the persons who will be affected by it. If there are faults, they are the faults of our legislation. If

there are abuses, they are the results of the failures of our policy. It is our policy and legislation, not the persons affected, that I criticise.

1.20 a.m.

Mr. Cyril Smith: I apologise for delaying the House at what I consider is a ridiculous hour to be discussing a Bill. The stupidity of the system by which we work leaves us with no alternative but to do so. This is a stupid and silly hour at which to be discussing a measure which will affect scores of thousands of people in this country.
I shall not take up the points made by the right hon. Member for Wolverhampton, South-West (Mr. Powell), except to say that sections of his argument tended to overlook the contribution which the people who we are discussing make, despite their language difficulties, to the general economy of the country. That might be a point worth making in their favour.
I spoke at length on Second Reading. I applied in the proper way through my Whips office to sit on the Committee. I was refused that right because of my party's representation in the House and despite the fact that my constituency contains many people who will be affected by this measure. None the less, I pay tribute to the Minister of State for Foreign and Commonwealth Affairs, Lord Balniel—who is not now present—for the courtesy which he showed to me personally and to some of my constituents who formed a deputation to discuss the implications of the Bill.
I am delighted by the amendments made to the Bill in Committee. I am grateful to those hon. Members who were able to effect amendments relating to the citizens of Kashmir and to the period of grace allowed for registration. I and many other hon. Members referred to both matters on Second Reading.
My next point has not been mentioned during the debate but it is a matter which I raised on Second Reading and which I must raise again, despite the hour of the day. The Bill refers to the right of Pakistani doctors to register. I ask the Ministers present to take such action as they can, with other Departments, to urge that the registration given to Pakistani doctors who are eligible for registration


shall be full registration by the General Medical Council and not temporary registration such as has been granted to them since 30th January 1972. I refer to doctors who entered this country before Pakistan left the Commonwealth and who did not know that Pakistan intended to leave the Commonwealth. Such doctors are still being granted temporary registration by the General Medical Council as opposed to full registration. Temporary registration affects considerably their opportunities for promotion in the hospital service.
I hope that the Ministers present will draw the matter to the attention of the Secretary of State for Social Services and possibly to the Privy Council. There is a need for the General Medical Council to consider the case of the Pakistani doctors who entered the county prior to Pakistan leaving the Commonwealth who, as a consequence of Pakistan's action, are being granted temporary registration by the council rather than full registration.
I, with other hon. Members, regret the need to introduce the Bill in the sense that we regret Pakistan's decision to leave the Commonwealth. None the less, I very much welcome the amendments made to the Bill in Committee. I thank the hon. Members who were in a position to make them.

1.24 a.m.

Mr. Wilkinson: I must take this opportunity to thank my right hon. and hon. Friends on the Front Bench for the way in which they conducted our proceedings in Committee.
There were three issues of great importance. First, there was the position of the Kashmiris. That was a matter on which my hon. Friends and I were prepared to vote against our Front Bench so as to achieve what we believed to be just. Secondly, there was the issue of voting, on which I withheld my judgment pending the production by the Government of an amendment which was watertight. Thirdly, there was the period of grace which would enable Pakistan citizens to exercise their right to register and to ensure that they had the full time to take up that right. I thank my right hon. and hon. Friends for the constructive and helpful way in which they conducted the proceedings.
I hope that this is the last such Bill, but it will be the last only if we have a new and comprehensive law of citizenship. On Second Reading, I said that of the countries listed in the British Nationality Act three were down and six were to go. Unless we change our laws of citizenship, I shall not be surprised if we find ourselves faced again with similar legislation. We have spent much time in deputations, representations, arguments and so on with this Bill. If the process has to be repeated for Indians, for example, or Bangalese or West Indians or other Commonwealth citizens who happen to be settled in this country, we shall be placing on ourselves quite unnecessary difficulties which we can obviate if we take the necessary action, and take it soon.
On this point, I must differ to some degree from my right hon. Friend the Member for Wolverhampton, South-West (Mr. Powell). I believe that from this Bill we should have learned that those who are settled here are in all senses our fellow citizens. That is the message of the Bill and it is with this in mind that we should go forward.
There were those who were apprehensive when the Bill was introduced. They remembered perhaps the sacrifices made by Moslem soldiers of the Indian Army alongside the British in many theatres of war on many continents. They may have remembered the arrival of the Indian Corps at the first battle of Ypres which probably saved the Western Front at the end of 1914. Many such things will have been remembered.
It was because of this that many Pakistani people felt that perhaps we were being vindictive and being too nostalgic about the Commonwealth, that we were feeling that because Pakistan had left the Commonwealth we should be a little punitive. I am glad that we have shown that we are not punitive but magnanimous—that, in contradiction to what my hon. Friend the Member for Torquay (Sir F. Bennett) felt, we have shown that we are able, by constructive and reasoned dialogue in Committee, to meet the needs of all our citizens in this country.
We may have lingering doubts about the tail of the Bill but I say that the heart of the Bill is right, and I am sure that the Government can take credit for it.

1.24 a.m.

Mr. Edward Lyons: The final shape of the Bill is much more to the satisfaction of most hon. Members who served on the Standing Committee than was the case when it was first presented to Parliament. I regret that the improvements were not made more willingly at the outset instead of being the result of a steady attack on the Government in Committee until, in the end, they are claiming that the improvements show great common sense. Without being churlish, I must say that it is a pity that common sense on the part of the Government did not appear very clearly at the outset.
The Bill is very much improved, particularly in relation to the Kashmiris, on which the Government had to be defeated, in relation to voting, although the Opposition had no support from hon. Members opposite originally on the issue, and in relation to the time for application, the time having been increased now from six to twelve months. We are grateful for these signs of light, however belatedly they appeared.
We now look to the future. Most Pakistanis will apply to be registered and will become British citizens. The Home Office is left with considerable residual powers in administrative terms in relation to this Bill and to the future. We shall watch to see how it interprets the phrase "five years ordinary residence." We shall watch to see whether it is interpreted generously or restrictively. We shall also want to see how the supply of forms proceeds and whether they are readily available. In particular we shall wait to see how the Home Secreary's discretion will be exercised in relation to those who are now caught by the withdrawal of the protection of Section 7 of the Immigration Act 1971.
In September 1974 the Pakistani community will be different from Commonwealth communities in this country. Some Pakistanis will have the superior status of British citizens and will be entitled to travel and work in Europe in the same way as any other citizens of a Common Market country. Others will be aliens and will have fewer privileges in comparison. Pakistan has decided to leave the Commonwealth. That seems irrevocable. We wish well to its citizens who are now to be ours.

1.32 a.m.

Mr. Richard: On Second Reading I expressed the view that it was perhaps unfortunate that the Government had felt it necessary to introduce the Bill at this time since it seemed possible then that there was a chance, at any rate, that Pakistan would reconsider its decision to withdraw from the Commonwealth. I still take that view. There would have been no great evil done had the position been left broadly as it was, although it may have been necessary to have some kind of temporary provision.
It is right, as the Minister said, that this Bill is about how we can buttress the change of political relationship between the two countries, and how we can buttress the effect of that on individual Pakistanis in this country.
There were four main criticisms of the Bill advanced on Second Reading. The first was the Azad Kashmiri point, the second dealt with the retrospection, the third was the shortness, as we felt it to be, of the time given to people to decide whether they wished to register, and the fourth was the fact that large numbers of people could be disfranchised merely because the Home Office procedures might not be speedy enough.
It is unique in my experience, and probably in the experience of many other hon. Members, for us to have reached this stage of a Bill's passage through the House and for the four major points of criticism made on Second Reading to have been met, either in Committee or finally this evening. It was a unique Committee. The Government position at one stage on a crucial vote was that they had what might loosely be called the payroll vote, two Ministers, two Parliamentary Private Secretaries and the Whip.
The remainder of the Committee—the hon. Member for Bradford, West (Mr. Wilkinson), the right hon. Member for Wolverhampton, South-West (Mr. Powell), for whose support we were grateful, if on occasions slightly surprised to receive it, and the other three Conservative members of the Committee, voted with us in an effort, as we thought, in a non-partisan if slightly painful process, to make the Government improve the Bill. We are grateful that the Bill has emerged in this way.
There is a point of criticism left which has been aired tonight. I hope that the Government will take serious note of the points made on the Third Schedule and will look at the matter again before introducing it into another place. What is essential is that the procedures which will be necessary under the Bill should work and that they should be seen to work. They should be explained in simple terms to those who will be affected by them. It is essential, too, that the registration and voting provisions, which in many ways are the most crucial provisions in terms of the personal participation in society of these people, should be explained and should work.
I give the Government fair warning. If we on this side hear of any failures in the mechanism, if we discover that forms are not available in Bradford, Rochdale or Birmingham, or in other areas where they are most needed, then, if I have anything to do with it, we shall badger them unmercifully so as to ensure that the procedures set up under the Bill work in practice, that the Pakistanis who desire to register get their registrations in in proper time and that those who go on the voting register for next year do so in the proper way.
We wish Pakistan well in the course which she has chosen. The next thing we should do perhaps is to welcome all those people who were Pakistanis but who under the Bill will become United Kingdom citizens in the full sense of the word. It will mean the accretion to the United Kingdom citizenry of a considerable number of people. In my view, it will in the long run benefit rather than harm the rest of us.

1.37 a.m.

Mr. Lane: The hon. Members for Manchester. Ardwick (Mr. Kaufman) and Bradford, East (Mr. Edward Lyons) particularly returned to the question of deportation. I underline more strongly than I did earlier that in the event of the Home Secretary deciding to use his power of deportation against an individual who is at present immune the matter will in every case be subject to appeal.
I am sorry that my right hon. Friend the Member for Wolverhampton, South-

West (Mr. Powell) persists in his view that we have committed a major error of judgment in the registration provisions in the Bill. He called them rather fiercely an abuse and absurdity in this context. As I said in Committee, to have done otherwise would have been totally inconsistent with the pledges we gave, mainly through by right hon. Friend the Foreign and Commonwealth Secretary, to the Pakistanis in this country when Pakistan left the Commonwealth.
The hon. Member for Rochdale (Mr. Cyril Smith) asked particularly about the medical profession. I hope that I can reassure him. If and when it is printed, perhaps he will read the report of the fairly long discussion which we had on this point during the debate of one of the schedules when I tried to explain the position about the registration of the doctors about whom he is concerned. I will write to him briefly summarising the position, which I hope will satisfy him.
I appreciate what my hon. Friend the Member for Bradford, West (Mr. Wilkinson) said. He has been much involved with this problem. He said that he hoped that this was the last of such Bills. I echo his hope, not so much for the reason he gave, although I do not disagree with it, but because I hope that we shall not have another case of a country leaving the Commonwealth.
I take the point of the hon. and learned Member for Barons Court (Mr. Richard) about the procedures. We are equally anxious to make the procedures work, and we shall accept prodding and badgering with good grace, from where-ever it may come. I hope that together we can make them work well.
There was much virtue in the Bill when it started on its course. There is still more in, it now. We are grateful for the help which we have had in improving it. I echo what my right hon. Friend the Minister of State said in the hope that the Bill will contribute to what we all want to see—better community relations in this country.

Question put and agreed to.

Bill accordingly read the Third time, and passed.

ADJOURNMENT

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Kenneth Clarke.]

TELEPHONE SERVICE (INSTALLATION CHARGES)

9 a.m.

Mr. Russell Kerr: I wish to draw attention to a practice which many people in Feltham regard as showing a humiliating and wrong-headed attitude on the part of the Post Office towards prospective renters of telephone equipment, namely the policy of demanding from a minority—in the main, council house tenants—a £15 deposit which
may be returned on request after four quarterly bills have been settled satisfactorily".
It may help the House if I quickly outline the circumstances which led to my discovery of this discriminatory practice which is so bitterly resented by many of my constituents in Feltham.
Some months ago, I was approached by a Mr. Burnett, who lives in a council house in Feltham and who is a skilled aircraft fitter at nearby London Airport and a person of complete integrity. Mr. Burnett had inquired about the installation of a new telephone in December of last year and was told that the installation charge would be £35. On the strength of that information, he asked for the application form to be sent to him. When it was received from the sales department of the West telephone area in London, he learned for the first time of the £15 extra deposit required from him.
Naturally, Mr. Burnett was irritated that the matter had not been mentioned up to that time. He rang the sales department and was told that the special deposit was required because—here I quote again—
all council tenants are considered to be bad payers".
As a person who values his good name and was annoyed, therefore, at being categorised as a bad payer, Mr. Burnett thereupon wrote a letter to Mr. S. H. P. Croft, the West telephone area manager, complaining about the extra deposit and alleging unfair discrimination against a whole class of people, namely, council house tenants.
Mr. G. G. Connell, the West area sales manager, replied to Mr. Burnett in due course, and began to sing a rather different tune in the sense that he claimed that it was not only council tenants who met this request for the extra deposit. People in privately-owned accommodation, he said, were also liable to be similarly treated, as, indeed, were business subscribers in certain circumstances.
Mr. Connell's letter went on:
Whether or not we ask for a deposit depends entirely on the circumstances, and is determined by our previous experience concerning the locality, the type of property or the type of business concerned. In the past we have encountered considerable difficulty in parts of the Feltham exchange area and, in order as far as possible to safeguard our revenue, we find it prudent in these localities to ask all our customers for a deposit before the telephone is installed.
A similar reply was received by me when I wrote to the area telephone manager on Mr. Burnett's behalf a short time later. Still feeling that a principle was involved here, I therefore asked Lord Peddie, the Chairman of the Post Office Users' National Council, to take up the cudgels on behalf of Mr. Burnett and myself.
Lord Peddie wrote promptly to the Post Office—presumably, to Sir William Rylands—and subsequently received a reply from its London Telecommunications Region supporting the West area manager. I quote now from that letter to Lord Peddie:
In Feltham there is quite a number of council estates and a very high proportion of our total debts arise in these areas. There is no question of West Area applying discrimination against council tenants as such. It is quite coincidental that in Feltham the areas of difficulty are council-owned.
In the light of those extracts, and having regard to what Mr. Burnett was told when he originally asked about the extra £15 deposit, one is entitled to say that there is probably a widespread practice, at least in West London, of fairly automatic discrimination against council tenants in the matter of the £15 deposit demanded by the Post Office.
There is a much more serious aspect to this matter which should be mentioned, namely, the question of natural justice. Whatever the headaches of the Post Office in regard to bad payers or even bad debts, these are problems which it shares with


virtually every other large organisation in the country.
In the normal way, the relatively tiny minority of bad debts is part of the overheads of the enterprise and forms part of the cost of the service. It is treated in the accounts of the enterprise just like any other overhead.
Whatever means the Post Office employs to reduce these small but irritating debts, clearly the one action which cannot be tolerated is the lumping together, for the purposes of discriminatory treatment, of people who, in the view of some petty bureaucrat in the Post Office, constitute a group or a geographical area of so-called "bad payers". It may of course represent a kind of bureaucratic tidiness to treat people in this way, but, in my view and that of many of my constituents, it is deeply and outrageously offensive to our national sense of fair play.
Not only are the problems of collecting moneys due no greater for the Post Office than for many thousands of other organisations; in certain respects, the situation of the Post Office is very much easier. It can and does disconnect the telephone service, often to the great embarrassment and inconvenience of the slow or non-payer.
If, despite everything, the Post Office still feels that life is intolerable for it without this extra £15 deposit to guard it against an occasional slow payer, let it not practise this class-biased and unfair system which it is attempting to impose upon the council tenants of Feltham. Let it come forward with a deposit scheme which will be demanded of every prospective telephone customer and not just of those, like my constituent Mr. Burnett, who have the misfortune to live in an area labelled as "bad payers" by tin-pot local Napoleons without the wit to see that there is nothing very special about the Post Office's payment situation—certainly nothing which can justify such a marked swerving away from the integrity and high standards which, at least until recently, characterised the British Post Office.
I beg the Minister to use his considerable influence to stop this new-type rot before it begins to corrupt others of our national institutions.

1.48 a.m.

Mr. Gregor Mackenzie: It is not my normal practice to intervene in Adjournment debates, but I feel that the matter raised by my hon. Friend the Member for Feltham (Mr. Russell Kerr) is worthy of a few sentences from the Opposition Front Bench. I thank my hon. Friend for drawing the matter to our attention because, although he raised it on a constituency basis, it is a practice which I should not like to see widely followed throughout the rest of the country.
The Minister will know from exchanges which we have had at Question Time that this is a practice which in one form or another is being followed by the Post Office in many parts of the United Kingdom. Although, like my hon. Friend, I feel that the Post Office has every right—indeed, the duty—to make every effort to collect any form of arrears, this manner of sorting out financial problems is not one that we commend to the Minister and to the Department which he sponsors, the Post Office.
I have two concerns, and I mention them briefly. The first is that, although my hon. Friend has referred to the situation in Feltham, it is one which occurs in other parts of the country where whole exchange areas are regarded as places of bad payers. This is mainly because in those areas there are large numbers of people living in council houses. I understand that the Post Office is anxious to improve the call rate, the number of people using telephones and the number having telephones in their homes. If there is to be an explosion in communications this is a situation which we want to see the Post Office encouraging rather than deterring.
I take exception to this practice, because this kind of discrimination is exceedingly offensive. I can tell the Minister from personal experience that the majority of working-class people living in council houses are good payers and are always very conscious of their obligations to meet their commitments. Very often they are better able to face them than other people. In my view, selectivity of this kind is exceedingly bad. It ill becomes a national enterprise, which should be a model, to behave in this way.
I know that the Minister has no direct responsibility here, but I hope that the right hon. Gentleman will convey the


words that we have uttered tonight to the Post Office and encourage it to do as my hon. Friend suggested and either adopt a national scheme or scrap this selective, discriminating and offensive practice.

1.50 a.m.

The Minister of Posts and Telecommunications (Sir John Eden): This debate initiated by the hon. Member for Feltham (Mr. Russell Kerr), provides me with the opportunity, which I welcome, to explain why the Post Office finds it necessary to ask for deposits as security against the payment of telephone bills.
The legal basis for these deposits is paragraph 46 of the Post Office Telephone Scheme T3/1972 made under Section 28 of the Post Office Act 1969. There are two types of deposits in use. The first is a short-term deposit which is offset against the first bill. This is used where there is any reason to doubt that the initial bill, which includes a connection charge and is therefore often much higher than subsequent bills, will be settled promptly.
The second type is the ordinary deposit which is held for as long as there is judged to be a continuing risk of default. The Post Office normally requires this type of deposit from those who have been habitual bad payers. The deposit is related to the customer's average quarterly bill and is usually refunded when four consecutive quarterly bills have been paid promptly.

Mr. Russell Kerr: Our argument is not that the Post Office occasionally does something but that it groups together a whole area of people—bad payers, good payers, marvellous payers and shockers—and they all get caught in this way. That is what my hon. Friend and I are complaining about, not that the Post Office occasionally takes a prudent decision to protect its interests in the way the right hon. Gentleman said.

Sir J. Eden: I took the point made by the hon. Gentleman and by his hon. Friend the Member for Rutherglen (Mr. Gregor Mackenzie) and understood it, and I shall refer to that in a moment. I thought that I should first set out the normal procedure and the legal basis for the carrying out of this practice by the Post Office.
A deposit is always required from customers whose service has been ter-

minated because of non-payment and who wish a service again.
The provision of telephone service entails the granting of considerable credit. Deposits enable the Post Office to provide a service even in cases where there is reason to doubt the credit-worthiness of applicants, while at the same time safeguarding the business, and therefore the majority of customers, from the consequences of default by the few. Creditworthiness is not an easy matter to establish, and inevitably, just as there are cases where the Post Office is not secured against bad debts, there will be cases where it can be shown that the taking of a deposit was unnecessary. There must always be a certain amount of subjective judgment involved in the decision to request a deposit, but I know that the Post Office is constantly seeking better methods of dealing with this difficult problem.
At present, the authority to request deposits is vested in local management with broad guidelines from telecommunications headquarters. Local managers make periodic analyses of bad debt cases and use the information from these—and here I come to the point raised by the hon. Gentleman—to indicate the localities, occupations or types of business from which requests for service must be given careful consideration.
Hon. Members can gain some idea of the problem facing the Post Office from the following figures: in the financial year ending March 1973, bad debts amounted to £4·8 million, equivalent to a levy of 44p on each and every exchange line. The amounts written off by the Post Office as a result of bad debts is increasing at a rate greater than that proportionate to the increase in the growth of the system and the inflationary trend. It is a problem of substantial dimensions. The total amount held in deposits at 31st March 1973 was just over £F3 million.
The hon. Member for Feltham referred to instances of alleged discrimination against people in his constituency. I am sure that as a result of this debate the Post Office will wish to look further into these cases and, I expect, will certainly follow this up in due course with a letter to him. There is, of course, no question of the Post Office discriminating against Feltham or any particular locality in the hon. Member's constituency.
The Post Office, has, however, had some difficulties in the area over unpaid accounts, and the local manager decided to request deposits from residential applicants in their exchange area wherever credit-worthiness could not readily be established. The existing guidelines used in the area are that such customers should pay £35 short-term deposits and £15 ordinary deposits.
The overall position in the Feltham exchange areas is somewhat disturbing. Apparently, three years ago, it became possible to give a large number of people on the waiting list a telephone service. Subsequently there were a large number of unpaid first accounts. In 1971, 67 outstanding accounts on the Feltham exchange were written off, representing approximately £2,000. In 1972 the number of accounts written off rose to 90, with a written-off amount of approximately £5,000. In March this year, the sum of £140 was lost in respect of one customer alone.
The hon. Member suggested that the apparent discrimination against some individuals or localities could be avoided, and the financial position of the Post Office could be improved, if all subscribers were required to pay connection charges in advance. This would, however, be very unpopular with customers and would be bound to cause disruption and delay to installation programmes, especially since the precise connection charge due to be charged in each case cannot be fixed until the engineer has completed the work of installation.
Local experience may indicate that special care must be taken in particular localities where there is a high incidence of bad debts. These are not necessarily or automatically by any manner of means council house areas or any other particular housing type of area. They can be areas of considerable affluence. This, however, is not the main criterion for requesting a deposit. Each case is looked at individually and all known circumstances are considered.

Mr. Russell Kerr: I am sorry to be so discourteous as to interrupt the Minister again, but I quoted from official Post Office correspondence which completely rebuts what he has just said. The Post Office area sales manager says "Yes, we

do cover whole areas." It is not a question of most people or a section or a minority of the subscribers being asked for the deposit. It is whole areas, in the case of Feltham whole council house areas. I repeat that it goes up the nose of my hon. Friend the Member for Rutherglen (Mr. Gregor Mackenzie) and myself that there should be this blanket discrimination against a section and not the selectivity that the Minister suggests to the House.

Sir J. Eden: I think that the hon. Member misunderstood me a little. I indicated that, where clear evidence is accumulated in a certain locality of a lack of credit-worthiness, in certain cases the local manager deems it wise to require deposits from that locality as a whole. But these are carefully considered and it is not something that the Post Office wishes to happen. It certainly does not wish to alienate its customers. It does not wish bad debts to arise in any locality.
As I said, I know that the Post Office will wish to look further into the matter in the light of the cases to which the hon. Gentleman referred, but I hope that he will understand that, where an accumulation of individuals have shown themselves to be bad debts in a particular locality, and there is a general experience of lack of credit-worthiness, it may be the right course to pursue as the Post Office has done.
I am sorry if this action has upset people who I am sure would not dream of defaulting on payments. Hon. Members will agree, however, I am sure, that particularly in the light of the figures I gave, that the Post Office has a difficult job in maintaining a balance between keeping its customers happy and protecting its revenue. Similar precautions to those that I have described are of course taken by local gas and electricity boards as well as by many private firms. Although such action may be necessary, it has to be recognised that this is a very sensitive mater. I am sure that it should always be handled with a great deal of care, understanding and tact. I emphasise that it is a matter of great reluctance to the Post Office that it has to go through a procedure like this at all.

Question put and agreed to.

Adjourned accordingly at two minutes past Two o'clock.